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INR 373 crore deal by Allcargo to acquire CCI

The contract logistics company of Allcargo's partner CCI is being acquired.

INR 373 crore deal by Allcargo to acquire CCI - Supply Chain Tribe by Celerity

In 2016, Allcargo acquired a majority ownership in CCI, and as a result, the joint venture Avvashya CCI was created. Now holding little over 61%, it will pay its partners Rs 145 crore to acquire the remaining 38.87%.

Allcargo Logistics said on Monday that it intends to consolidate its operations by purchasing the contract logistics division of its joint venture partner CCI Integrated Logistics and selling it the customs clearing division.

The Contract Logistics division manages inventory and offers renowned Indian and foreign clients in the chemical, car, e-commerce, and other industries third-party supply chain solutions. The company declared an operational profit of Rs 31 crore in the December quarter and has a total space of over 5 million square feet spread over 69 warehouse sites in India.

According to the management of Allcargo, the purchase will increase the synergies between express distribution and contract logistics, further bolstering the group's position. Shashi Kiran Shetty, the founder and chairman of Allcargo, said in a statement to the media, "Post demerger of Allcargo Terminals and TransIndia, which has already received NCLT approval, the company shall now have two distinct business segments under International Supply Chain and Express & Contract Logistics.

The board has also given the go-ahead for the sale of the company's non-core customs clearing division, in which it would sell a 61.13 percent share for a little over Rs 42 crore.

Allcargo's Chief Strategy Officer Ravi Jakhar stated that the business has been increasing market share and would do so going forward in an interview with CNBC-TV18 last month. He stated that although he anticipates some volume sluggishness in the quarter from January to March, a comeback will begin in April.

Jakhar said that the company's goal of achieving a 9–10 percent EBITDA margin and sales of Rs 25,000–Rs 30,000 crore by the financial year 2026 is still in place.