MUFG Bank, Koch Group Seek CCI Nod for Shiprocket Stake

New Delhi, Oct 24 (PTI) Japan-based MUFG Bank and American conglomerate Koch Group have sought approval from the Competition Commission of India (CCI) to acquire minority stakes in logistics aggregator Shiprocket.

According to a notice, MUFG Bank, a wholly-owned subsidiary of Mitsubishi UFJ Financial Group, Inc, has sought CCI nod for acquisition of a minority stake in logistics services aggregator platform.

"The proposed transaction entails the acquisition of minority shareholding of the Shiprocket Private Ltd (Target) by the MUFG Bank, Ltd (Acquirer)," said a notice filed with the CCI on Thursday.

MUFG Bank is engaged in banking services in India.

According to a separate notice filed with the regulator, Koch Group through its arm KDT Venture Holdings has proposed to pick minority shareholding in Shiprocket.

"By way of the proposed transaction, KDT Venture Holdings, LLC (KDT) proposes to acquire minority shareholding in Shiprocket by way of both primary subscription and secondary purchase".

KDT Ventures Holdings is a US-based early-stage venture capital firm. It is a wholly-owned subsidiary of Koch, Inc (Koch Inc together with its subsidiaries, including KDT are collectively referred to as Koch Group).

Koch is one of the largest private companies in the US after multinational food corporation Cargill Inc.

The proposed transactions are in the nature of an acquisition of shares and are notifiable under Section 5 of the Competition Act, 2002, MUFG Bank and Koch Group said in two separate notices.

KDT is not directly engaged in any business activity that is similar to or has vertical or complementary linkages to Shiprocket. However, the activities of the Koch Group and Shiprocket exhibit certain notional/ theoretical overlaps.

Further, MUFG Bank and Koch Group said the proposed transaction does not raise any competition concerns irrespective of the manner in which the relevant markets are defined and will not lead to any change in the competitive landscape in any market in India.

Accordingly, it is submitted that the definition of the relevant markets may be left open, they added.

However, for the ease of the fair trade regulator CCI in its assestment, Koch has identified horizontal overlap in enterprise resource planning services in India and complementary overlaps in warehouse management systems and warehousing services.

On Wednesday, Shiprocket has reported widening of loss to Rs 595 crore in the financial year 2024 on account of one-time restructuring cost, employee stock ownership plan and investments in emerging business.

The company had posted a loss of Rs 340 crore in the fiscal year 2022-23.

Shiprocket said that the company has reduced cash flow burn by almost half to Rs 100 crore in FY'24 from Rs 191 crore in FY'23 and is on path to full profitability in the current fiscal year. The revenue of the company increased by 21 per cent to Rs 1,316 crore in FY'24 from Rs 1,089 crore in FY'23.