Information on the Target

NDR Warehousing ("NDR") is recognized as one of India’s largest warehouse development and operating platforms. The company boasts a diverse asset portfolio that spans across ten major cities in India, including Chennai, Mumbai, the National Capital Region (NCR), Bangalore, Pune, Coimbatore, and Kolkata. With operational assets exceeding 14 million square feet and an impressive aggregate occupancy rate of over 95%, NDR is positioned as a leader in the warehousing sector. Furthermore, the company has an additional 5 million square feet currently under construction or proposed development, underscoring its ambitious growth plans.

NDR is also evaluating a potential listing of part of its warehousing portfolio as an Infrastructure Investment Trust (InvIT), which would provide an innovative avenue for attracting institutional investment and liquidity into its operations.

Industry Overview in India

The warehousing sector in India has been experiencing significant growth, driven by a surge in e-commerce, the need for organized logistics, and the rise of smaller firms seeking proper distribution channels. The logistics industry is poised to expand, supported by government initiatives like the Goods and Services Tax (GST), which has streamlined supply chains and encouraged a more centralized warehousing strategy.

Recent trends indicate a shift towards tech-enabled warehousing solutions, which enhance efficiency and reduce operational costs. The adoption of automation, Artificial Intelligence, and data analytics within warehouses has become crucial for businesses aiming to optimize their supply chain operations.

Furthermore, India’s warehousing space is expected to continue growing, further fueled by rising consumer demand and increasing foreign investments. Major players are focused on developing state-of-the-art facilities and adapting to the changing landscape of consumer behavior and supply chain dynamics.

Total warehousing demand in India is projected to grow substantially over the next couple of years, underlining the importance of tapping into this growing market, particularly in urban regions where logistics challenges persist.

The Rationale Behind the Deal

Investcorp’s follow-on investment of INR 500 crore (approximately $60.8 million) in NDR Warehousing reflects its confidence in the company's leadership and performance within the burgeoning warehousing sector in India. This investment not only builds on Investcorp's previous commitment of $55 million but also highlights the firm’s long-term strategic vision for capitalizing on the anticipated growth in the sector.

With the exploration of an InvIT listing, NDR is positioned to leverage market opportunities and to enhance its financial stability. Investcorp recognizes these developments as critical step-stones that could significantly benefit both parties in the long run.

Information About the Investor

Investcorp is a global investment manager specializing in alternative investments, with a strong presence in the Indian market. The firm’s India Real Estate team has been actively investing in real estate projects across major tier-1 cities, accumulating over $350 million in deployments across various sectors, including warehousing, residential, and education. With a focus on social infrastructure and high-growth potential areas, Investcorp aims to create resilient and diversified portfolios.

In addition to real estate, Investcorp is active in the mid-market private equity space in India, with investments spanning across consumer technology, healthcare, financial services, retail, SaaS, e-commerce, and technology, showcasing its comprehensive approach to sustainable growth and investment.

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The current investment by Investcorp in NDR Warehousing represents a strategic move in a rapidly growing sector. Given the increasing demand for logistics and warehousing spaces in India, this investment could be viewed as highly opportunistic, especially with NDR's established market presence and high occupancy rates.

Moreover, as NDR considers a potential InvIT listing, it stands to gain access to wider capital pools, which could facilitate further expansion and enhance risk-adjusted returns for Investcorp. This could also potentially position NDR as a leader in a sector that is becoming increasingly vital to India's economic framework.

Investcorp’s strategic commitment to doubling down on its investment in NDR is indicative of the positive outlook for the warehousing sector in India. The firm’s insights and resources can significantly contribute to NDR’s growth trajectory, thus solidifying their partnership as a beneficial investment in the long term.

In conclusion, while the investment carries inherent risks associated with market fluctuations and regulatory challenges, the strong fundamentals and growth potential of the warehousing industry in India make this an attractive deal, suggesting a good investment opportunity for both Investcorp and NDR Warehousing.

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