LEAP India Files for Rs 2,400 Crore IPO in KKR Exit Strategy

Overview of the IPO Filing

On August 30, 2025, LEAP India, a KKR-promoted supply chain solutions provider, filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise Rs 2,400 crore through an initial public offering (IPO). This move marks a significant step toward KKR’s partial exit from its majority stake in the company, acquired in 2023 for approximately $275 million (Rs 2,225 crore). The IPO, comprising a fresh issue of Rs 400 crore and an offer-for-sale (OFS) of Rs 2,000 crore, aims to fund debt repayment and support general corporate purposes while allowing KKR to realize gains.

Contents

IPO Structure and Utilization

Fresh Issue: Rs 400 crore, with Rs 300 crore allocated for repaying borrowings and the remainder for working capital and growth initiatives.
Offer-for-Sale: Rs 2,000 crore, led by KKR’s Vertical Holdings II (selling Rs 1,998.6 crore) and KIA EBT Scheme 3 (selling Rs 1.38 crore).
Pre-IPO Option: The company may raise up to Rs 80 crore through a pre-IPO placement, potentially reducing the fresh issue size.
Employee Benefits: Includes a reservation and discount for eligible employees.

Company Background

Founded: 2013 by Sunu Mathew.
Business Model: Operates as the largest on-demand asset pooling provider in India’s supply chain sector, offering pallets, containers, and material handling equipment under a “share and reuse” model.
Assets and Network: Manages 13.57 million assets, with 7,747 customer touchpoints and 30 fulfillment centers as of May 2025.
Financials: Revenue grew 44% to Rs 365 crore in FY24, with profits surging 4x to Rs 37 crore, supported by a 78.64% KKR stake.
Clients: Partners with over 900 customers, including blue-chip firms like Marico and Hindustan Coca-Cola.

KKR’s Exit Strategy

Acquisition: KKR acquired a majority stake in 2023, valuing LEAP at $600 million post-allotment after a $63 million infusion in 2024.
Partial Exit: The Rs 2,000 crore OFS allows KKR to offload a portion of its 78.64% stake, though not a full exit, aligning with its Asia infrastructure strategy.
Valuation Target: KKR aims for a $2.0-2.5 billion valuation post-IPO, pending roadshows and investor feedback.

Market and Strategic Context

Timing: Filed amid a robust IPO market, with 13 listings scheduled for the first week of September 2025.
Lead Managers: JM Financial, Avendus Capital, IIFL Capital Services, and UBS Securities India.
Economic Support: LEAP’s growth aligns with India’s push for supply chain modernization, bolstered by its $63 million funding round in 2024.

Challenges and Risks

Market Volatility: Global economic uncertainties, including U.S. tariffs, could impact investor sentiment.
Debt Burden: Outstanding borrowings of Rs 873.6 crore as of May 2025 require careful management.
Competition: Faces rivalry from established players in the pallet pooling segment.

Frequently Asked Questions (FAQs)

What is the size of LEAP India’s IPO?

The IPO aims to raise Rs 2,400 crore, with Rs 400 crore as a fresh issue and Rs 2,000 crore via OFS.

How will the fresh issue proceeds be used?

Rs 300 crore will repay borrowings, with the rest for working capital and corporate purposes.

Why is KKR exiting its stake?

KKR is executing a partial exit to realize gains from its 2023 investment, targeting a $2.0-2.5 billion valuation.

What is LEAP India’s business model?

It provides on-demand asset pooling services, including pallets and containers, under a “share and reuse” framework.

When was the DRHP filed?

The DRHP was filed with SEBI on August 30, 2025.

What are the risks for investors?

Market volatility, high debt levels, and competition pose potential risks.