CJ Logistics’ Indian operation Darcl taps IPO with SEBI

CJ Darcl Logistics, CJ Logistics Corp.'s Indian operation, is seeking to go public in the South Asian country to expand its footprint in the world’s most populous country as part of the Korean logistics giant's push to become a global leader in the sector.

CJ Logistics said on Thursday that CJ Darcl has applied for a preliminary review for its initial public offering with the Securities and Exchange Board of India (SEBI), with a plan to list on the Indian stock market in the first half of next year.

CJ Logistics is the first Korean logistics company to seek an IPO of a foreign operation in its respective market, the Korean company added.  

The Korean company hopes to secure funds through the upcoming IPO to accelerate its business expansion in India, set to become the world’s No. 3 consumer market by 2027, according to BMI Research under Fitch Solutions Group.

“India with great growth potential thanks to its massive consumer market is CJ Logistics’ most important strategic base in the world,” said CJ Logistics Chief Executive Officer Kang Sin-ho.

“We will raise proceeds for future investment via an IPO and speed up our innovative growth to ascend to true global leadership in the logistics sector.”

India now ranks as the world’s fifth-largest consumer market but its population has already outnumbered that of China to become the world’s most populous country as of June this year, according to the United Nations’ estimates.

The country’s economy is also forecast to grow rapidly, in part thanks to the government’s Make in India initiative, which aims to lure foreign companies to run their manufacturing bases in the South Asian country.

Foreign companies are welcoming the initiative and its various tax benefits at a time when China is grappling with an exodus of foreign companies due to regulatory and geopolitical risks.

This is also a boon to the logistics business in India.

FROM INDIA’S NO. 1 TO GLOBAL NO. 1

Founded in 1986 as Darcl Logistics, India’s No. 1 logistics company joined CJ Logistics in 2017 when the Korean logistics giant acquired its 50% stake to enter the Indian market.

Since then, the Indian operation under the name of CJ Darcl has enhanced its integrated logistics service and achieved fast growth.

In 2022, it raked in operating profit of 17.3 billion won ($13.3 million) on sales of 672 billion won.

CJ Darcl operates more than 200 logistics bases across India and offers integrated logistics services, covering contract logistics, international freight forwarding, project cargo and rail transportation.

Last month, the Indian subsidiary signed a memorandum of understanding with Tata Motors Ltd., the country’s major automaker to reinforce logistics collaboration between the two parties.

The automaker has been supplying transportation vehicles to CJ Darcl.

As a one-stop logistics solution provider, CJ Logistics operates in 161 cities in 36 countries across the world.

Its global push has picked up speed since it acquired DCS in the US and Gemadept in Vietnam in 2018. It entered China, the No. 2 consumer market after the US, in 2004.

The Korean logistics giant also plans to open a Global Distribution Center in Saudi Arabia, a burgeoning logistics hub in the Middle East, by 2024.

Write to Young Chan Song at 0full@hankyung.com

Sookyung Seo edited this article.