KKR Infra fund looks to buy majority stake in leap India, ET Infra

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Private equity firm KKR’s infrastructure fund has started exclusive talks to pick up over 51% stake in supply chain and warehousing asset pooling company Leap India, at an enterprise valuation of around ₹3,000 crore, people aware of the development said. The deal will largely be a secondary purchase of shares from existing investors along with a small portion of primary capital infusion to support the company’s growth, one of the sources said.

Many early backers of the company will exit in this deal, while some investors will make partial exits. Founder Sunu Mathew, who currently holds around 25% stake in Leap India, will continue to hold a substantial stake in the business, the person said.

KKR declined to comment on the development. Calls and text messages to Mathew went unanswered till press time.

Founded in 2013, Leap provides wooden pallets, crates, and utility boxes on lease to its customers in industries such as consumer goods, FMCG, retail, automotive, and ecommerce. It counts companies such as Amul, Nestle, PepsiCo, Coca-Cola, Amazon, Flipkart, LG, and Abbott among its clients. The company operates 25 warehouses, 22 manufacturing units, more than six million managed assets, and 4,000-plus consumer touch points across the country.

“This industry is dominated by a few players and Leap is a clear market leader in India with over 70% share,” the person cited above said.

Its backers include Morgan Stanley, Schroder, IIFL, Mayfield, IndiaNivesh, Sixth Sense Ventures, and TVS Capital, among others.

Morgan Stanley invested $25 million in the company in 2021. Also, in 2021, Leap raised $34 million in a secondary round from investors led by Schroder Adveq and IIFL fund, giving early backers Mayfield Fund, IndiaNivesh and Six Sense Ventures a partial exit.

Leap India reported a revenue of ₹211.34 crore in FY22, growing from ₹174 crore reported in the previous financial year, as per a report by credit rating agency India Ratings.

The company’s Ebitda in FY22 stood at ₹112.9 crore, against ₹84.2 crore in FY21, with Ebitda margin improving to 53.5% from 48.4%. Leap India’s profit stood at ₹26.4 crore in FY22, up from ₹8.3 crore in the previous year.

Brambles is a global peer of Leap. KKR is one of the most active investors in the Indian infrastructure sector.

The private equity firm has made commitments worth over $2 billion from its Asia infrastructure fund in India, KKR senior management had told ET in an interaction last month.

These include a $650-million investment in Serentica Renewables, an energy transition business of Vedanta Group, and investments in renewable energy producer Hero Future Energies, IndiGrid, an infrastructure investment trust that holds solar and transmission assets, and in roads.