LEAP India Limited (Neutral)

Highlights

LEAP India Limited (LEAP) incorporated in 2013 and offers pallets and containers to customers on a pooling model. In addition, they provide Material handling equipment (MHE) to customers on a hire arrangement. Their assets are rented out to customers either on a static usage basis (Static Hire) or a movement basis (Movement Hire).

Further, they also benefit from multiple monetization levers, including allotment fees, per day rental and services charges (including fees for any asset losses). They offer a range of ancillary services such as repair and maintenance, transportation, and inventory management. These services are billed separately and provide customers with a one-stop solution for their supply chain needs, further enhancing LEAP’s revenue base.

Utilizing their share and reuse business model (pooling), they are the largest on-demand asset pooling provider in India’s supply chain management. Through their large asset base and pan-India network, they are able to serve a diverse customer base spanning sectors such as FMCG, food and beverage (F&B), third-party logistics (3PL), e-commerce and quick commerce, automotive, industrials and others.

Out of the total proceeds of Rs. 24,800 mn, Rs. 3,600 would go towards repayment/pre-payment, in full or part of certain borrowings availed by the company, ~Rs. 1,200 mn mn would go towards general corporate purpose. Further, ~Rs. 20,000 mn going towards promoter selling shareholders of the company.  

Key Highlights

• The rapid growth of end-use markets such as FMCG, F&B, 3PL, e-commerce and quick commerce, automotive and industrials, is accelerating the adoption of palletization to support scalable, reliable, and cost-efficient supply chain operations. The pallet use by the F&B industry is expected to grow at a CAGR of 7.88 pct from 26.41 mn in FY26 to 38.59 mn in FY31, while pallet pooling use by industrials and other sectors expected to grow at a CAGR of 7.99 pct from 9.61 mn in FY26 to 14.11 mn in FY31.

• LEAP is the only player in India currently operating at a considerable scale and at a national level in the pallet pooling segment (~90 pct market share). TARON (LEAP’s Subsidiary) is recognized as the leading forklift pooling player and a leader in the lithium-ion segment of MHEs, having been the first to introduce these solutions in India.
• LEAP has established a broad and connected pooling network across India, which helps meet customer needs in a timely manner by allowing for quick deployment of hired pallets and collection of de-hired pallets over short distances. With the acquisition of CHEP India in January 2025, they integrated CHEP India’s established asset pooling network with own and have also expanded reach across various industry customers and enhanced ability to serve a broader customer base.
• LEAP typically enter into contracts with their customers, with contract durations ranging from one to five years with auto-renewal provisions. These contracts provide predictable cash flows and financial stability, as well as renewal rates that offer strong revenue visibility for three to five years.
• Their contract structures allow for periodic price escalations and cost pass-throughs, ensuring that inflation-linked cost increases are passed on to customers and their margins are protected. Additionally, their contracts also include provisions for recovery of pallet repair costs, breakage costs and loss-recovery.
• LEAP’s key growth strategies include (i) To increase penetration of palletization and pallet pooling (ii) Integrate CHEP India and selectively pursue inorganic growth opportunities (iii) Expand product offerings to existing customers (iv) Expand globally.
• The sales of the company have grown by 41 pct CAGR over FY24-26 and EBITDA/profit has grown 33 pct CAGR/30 pct CAGR over same year. In FY26 the company reported sales of Rs. 7,295 mn, rose 56 pct YoY driven by revenue from sale of pallets and containers. EBITDA of the company increased 41.4 pct YoY to Rs. 3,610 mn. In FY26 the company posted profit of Rs. 623 mn, up 66 pct YoY.

Key Risk

• The company might face supplier concentration risk, as Top 10 suppliers and service providers accounted for 63.3 pct of FY26 purchases.
• LEAP relies on internal and third-party systems for asset tracking, billing and customer integration. System failures, cyberattacks, inaccurate billing or prolonged downtime could disrupt operations and damage customer relationships.

Financial Performance

Source: – RHP.

Valuation

LEAP India Limited (LEAP) LEAP is a tech-enabled asset pooling services company transforming how India moves goods. LEAP’s model replaces ownership with on-demand access to high-quality assets, helping businesses operate leaner, faster, and more sustainably. By anchoring operations in circular economy principles, LEAP enable clients to reduce waste, improve asset utilization, and cut down logistics costs, without compromising performance. With a network of 30 warehouses/FCs, 7 outsourced pallet manufacturing units, 900+ valuable customers, 3,250+ dedicated employees, and support 7,000+ consumer touchpoints, LEAP deliver reliable, future-ready supply chain solutions at every step. At the upper end of the price band of Rs. 159, the issue is priced at an EV/EBITDA of 21.6x its FY26 post issue capital. The issue appears to be fully priced.  

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