FOREIGN INVESTORS’ VIEW OF INDIAN LOGISTICS

LoGon Investments - Confidential

8th Express, Logistics & Supply Chain Conclave

September 25, 2014

LoGon Investments Gmbh

LoGon Investments - Confidential

FOREIGN INVESTORS PERCEPTION OF INDIAHOW INTERESTED FOREIGN INVESTORS ARE IN INDIAN

LOGISTICS?WHY FOREIGN INVESTORS ARE ATTRACTED BY INDIAN

LOGISTICS?WHAT KIND OF COMPANIES ARE FOREIGN

INVESTORS LOOKING FOR?

Oct. 2012

THE AGENDA

FOREIGN BUSINESS PERCEPTION OF INDIA

100-DAY REPORT ON PM MODI

RESURGENCE OF THE INDIAN GROWTH STORY?

CAUTIOUS OPTIMISM IS THE VERDICT

FOREIGN INVESTORS BEHAVIOR

LOWER-THAN-EXPECTED RETURNS FROM INVESTMENTS, LOW LIQUIDITY AND UNCERTAINLY AROUND GOVERNMENT POLICY

AND REGULATIONS

HOWEVER, FDI SEEMS TO BE BACK

28% UP SINCE JAN 1ST 2014

IPO OVER SUBSCRIBED 60 TIMES

RAISES 212 CR

RAISES 100 CR

SEPT 2014 MAJOR LOGISTICS DEALS

“ANY MULTINATIONAL SERIOUS ABOUT ITS LONG-TERM HEALTH AND THE SUSTAINABILITY OF ITS

GLOBAL EARNINGS OVER THE NEXT DECADE MUST CONTINUE TO TREAT INDIA WITH THE UTMOST

SERIOUSNESS”

Agility Emerging market Index 2014 Report

BELIEF IN THE LONG TERM STORY

HOW INTERESTED ARE FOREIGN INVESTORS IN INDIAN LOGISTICS?

TRANSFORMATION OF SUPPLY CHAINS DRIVEN BY CUSTOMER CENTRICITY

EVOLUTION OF THE LOGISTICS VALUE MODEL

INNOVATION

OPTIMISATION

WHAT LOGISTICS COMPANIES ARE FOREIGN INVESTORS LOOKING FOR?

LoGon Investments - Confidential

Logistics

services

WHAT LOGISTICS SERVICES?

TRACK RECORD OF GROWTH AND PROFITS MINIMUM SCALE

VOLUMES / OFFICES / STAFF IT SYSTEMS

SHARED OPERATING SYSTEM ACROSS BRANCHES

ERP IN BEST CASES GEOGRAPHICAL REACH REPUTATION AND GOVERNANCE

CLEAN ETHICAL TRACK RECORD SEVERAL YEARS OF PRESENCE ON THE

MARKET CLEAR LEGAL STRUCTURES

FIRST: HEALTHY BASE

STRONG USP PROPOSITION

POSITIONED TO CAPTURE UPCOMING EVOLUTIONS I.E. INTEGRATED LOGISTICS SOLUTIONS MULTI-USER CONTRACT LOGISTICS VALUE ADDED WAREHOUSING SPECIALIZED INDUSTRY SOLUTIONS TIER II AND III CITY EMERGENCE USE OF CLEANTECH POTENTIAL FOR EXPANSION OUTSIDE OF INDIA

WHILE ABLE TO PRICE ITSELF IN THE MARKET

SECOND: UNTAPPED POTENTIAL

SUSTAINABLE EARNINGS BALANCED CUSTOMER BASE WITH NO

CUSTOMER WEIGHTING MORE THAN 20% CUSTOMER RETAINED BY QUALITY OF SERVICE,

NOT PERSONAL RELATIONSHIP

SUSTAINABLE SERVICES (OPERATIONAL EXCELLENCE) PROCESSES, CERTIFICATIONS, KPIS

SUSTAINABLE MANAGEMENT TEAMS, NOT ONE-MAN-SHOWS SHARED VALUES

THIRD: SUSTAINABLE ORGANISATION

FINANCIAL INVESTORS WANT AN EXIT MINIMUM IRR OF 20%, GENERALLY AFTER 5

YEARS SELL TO A STRATEGIC OR A FINANCIAL PLAYER

STRATEGIC PLAYERS WANT• COSTS SYNERGIES• REVENUES SYNERGIES

FOURTH: HIGH RETURN POTENTIAL

Values discrepancies (corp./family)

Unrealistic valuation expectations

No willingness to accept dilution or sale

Weak appetite for operational excellence

Unclear business plans and strategies

Related party transactions, Poor control systems, Tax risks

Poor organizational culture

WHAT INVESTORS GET?

CASE STUDY:CRITICALOG INDIA PVT LTD

CRITICALOGCRITICAL CARGO :

• Time sensitive• Value sensitive -

Precious or High value (up to INR 6 Crore / Consignment)

• Temperature sensitive: 15-25°C / 2-8°C / (-) 18°C

• Delicate or non-replaceable

• Hazardous

CRITICALOG

CRITICALOG

CRITICAL SOLUTIONS are crafted around:

• Domestic & International air movements

• Bonded or standard warehousing

• Customs clearance• Fiscal representation• Customized & value

added logistics services

CUSTOMIZ

ED CRITICAL

EXPRESS

WRAP UP

FOREIGN CAPITAL IS VASTLY AVAILABLE TO SUPPORT SOLID LOGISTICS BUSINESSES

PREFER FOREIGN INVESTORS IF YOU SEEK INTERNATIONAL EXPANSION (M&A) INTERNATIONAL KNOW HOW MNC CUSTOMERS INTERNATIONAL SELL-OUT

PREFER INDUSTRY FOCUSED FUNDS IF YOU SEEK STRATEGIC INPUT, OPERATIONAL IMPROVEMENTS NETWORK EXPANSION.

WHY CHOSE AN INTERNATIONAL FOCUSED FUND?

THANK YOU

LoGon Investments - Confidential

LOGON INVESTMENTS GMBH