Dubai: Dubai-based logistics company Tristar will launch its first fuel stations in India later this year and then gradually scale up presence in that market. The first ones will be in Kochi city in the south Indian state of Kerala.
The company will own and operate the fuel and convenience store locations in association with an “international oil company”, according to Eugene Mayne, Group CEO of Tristar, who will have a 10.85 per cent stake after the IPO against the current 15.27 per cent. “These will be high-tech fuel stations and will be co-branded with the international oil company,” he added.
“This will be our first footprint in India’s fuel retailing sector – the wheels have been set in motion and will be fully owned by us.”
It was in 2019 – after nearly two decades - that India opened up its fuel retailing to more players, including foreign companies. Reliance Industries is going big in widening its presence in this space through an alliance with UK’s BP.
As for Tristar, it operates fuel stations in some of the East African markets. But notching up a presence in India and then building on it will be a medium-term priority.
- The Tristar Transport IPO is open only to qualified investors. Minimum size of the application is Dh500,000.
- Offer opens April 4 and runs until April 15. The promoters' aim is to raise between $120 million to $160 million.
- There is no 'greenshoe option', according to the Tristar CEO, if the IPO is oversubscribed. This option would have allowed the company to retain some of the oversubscribed funds if it so chose.
- The Tristar Transport listing will be on April 22.
- Kuwait's Agility, which is into warehousing and logistics, will remain majority shareholder even after the IPO.
Go all hi-tech
Mayne’s emphasis on creating state-of the-art locations mirrors what’s been happening in this retail category across India. The country’s infrastructure networks have expanded exponentially in recent years, with highways making inter-state connectivity a smoother process. Fuel stations – at least the new ones - have gone into full next-generation mode, becoming lifestyle destinations as much as the place where you take the care for a refill.
Full speed expansion
India is not the only move that Tristar, which operates an extensive transport fleet in the Gulf as well as marine vessels, has on its agenda right now. Earlier this week, it announced an IPO and a listing on DFM (Dubai Financial Market) by as early as next month. The IPO is only the second one in Dubai since 2018, with Al Mal Capital REIT mopping up Dh350 million in December.
Tristar Transport is the entity that is being floated, with up to 24 per cent of the shares available. The promoters expect to take in between $120 million to $160 million this way. “April 22 will be the first day of trading - anyone is free to subscribe provided they subscribe for a minimum of Dh500,000,” said Mayne.
According to market watchers, the IPO’s timing should ensure a fair bit of investor demand, with institutional investors likely to throw in heavy support.
Wide network reach
Tristar, which launched operations in 1998, has developed an extensive network in the UAE and Gulf markets, as well as some key overseas territories. All told, it operates in 21 countries.
Its current road transport fleet numbers more than 2,000 vehicles, and then there are the 35 maritime. Adding further heft to operations are the 69 fuel farms and over 100 remote fuel sites, which helps deliver “an integrated logistics offering to the energy industry,” the company said in a statement to announce the IPO.
The main benefit from the stock float is give Tristar the funds to pay off Dh197 million in debt. “The debt on our books is something we always focus on given the capital intensive nature of the business,” said Mayne. “The balance from the IPO proceeds will be used for general corporate expenses and some capital expenditure to supplement our growth this year and the next.
“We have five banks working on the IPO and it’s up to them to get good results,” the CEO said. “But we are confident about its timing.
“To be honest, we couldn’t have chosen a better time to launch – markets are at all-time highs, there is so much liquidity and interest rates are low. We couldn’t have had a better window than now.”