Mandala Capital buys Gati Kausar

Private equity firm Mandala Capital has bought out Gati Kausar, a cold chain solutions firm of express logistics company Gati, increasing its stake from 30% to more than 99%.

“The transaction was envisaged as an amalgamation of Mandala’s business transformation strategy and focus on the cold chain sector along with Gati’s ongoing strategy of exiting non-core businesses,” the Singapore-based investor said in a statement on Friday.

The deal happened for a small amount undisclosed by the parties. Mandala will assume all the debt of Gati Kausar. As a result, Gati’s debt will reduce by Rs 100 crore.

Mandala had been invested in Gati Kausar since 2014. Gati is owned by Allcargo Logistics.

“Gati Kausar is an established, 35-year-old brand with a trusted name in the cold chain industry,” said Uday Garg, managing partner at Mandala Capital. “We believe that under our complete ownership, the company will be able to fully leverage our technical expertise and financial resources to realise its potential over the next few years.”

Indian cold chain industry has been growing at a compounded annual growth rate (CAGR) of 18% over the last five years and has the potential for increased and continued growth with 80-85% of the industry still controlled by unorganised players, according to industry estimates.

The pandemic has further accelerated growth rates with the sector playing an increasingly vital role in the broader food value chain, starting from local procurement to last-mile delivery.

Demand from producers, processors, quick-service restaurants (QSRs) and retailers for efficient, cost-effective, and reliable supply chains remains high; likewise, the end consumer increasingly expects products to be delivered in a timely and safe manner.