Mahindra logistics to acquire majority stake in Whizzard

Mahindra Logistics (ML) has announced strategic investment into Zipzap Logistics Pvt Ltd.

Key points to note –

  • Founded in 2018 and headquartered in Hyderabad, ZipZap is a tech enabled last-mile delivery logistics company operating under the brand name Whizzard.
  •  Total deal value is Rs 71.7 crore in lieu of which ML will get 60% stake on a fully diluted basis:
    • Rs 29.4 crore as direct equity; and
    • Rs 42.3 crore as Compulsorily Convertible Preference Shares (CCPS)
  • Deal is expected to conclude by November 30, 2023 – this seems to be the conversion date for CCPS.
  • Zipzap’s FY 19, 20 and 21 turnover was Rs 7.7 crore, Rs 74.4 crore and Rs 88.3 crore respectively. Profit numbers are not disclosed but very likely that the operations would be in losses. The deal value and structuring is indicating towards an urgent need of fund infusions into the operations.

From ML’s perspective, it seems a decent entry into the last mile tech enabled delivery business at reasonable costs.

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