About Afcom Holdings Limited

AFCOM HOLDINGS Limited is a professionally managed International Cargo airline that began its business in Chennai. It is founded by industry professionals who have notable experience in building successful businesses and partnering with industry leaders in promising areas of Defence, IT, Financial Services, Real Estate and Aviation. They have developed a wide range of service options to meet the growing needs of the customers.

AFCOM HOLDINGS Limited provides cargo solutions and products across various countries via International Hubs. AFCOM HOLDINGS Limited offers notable products that include General Cargo, Flying Fresh, Flying Pharma, Flying priority, Fly Courier, Project Cargo, Dangerous Goods and High Value Cargo.

AFCOM HOLDINGS Limited services destinations across ASEAN countries. They specialize in meeting the needs of the air transport industry by providing customized services at a very competitive rates to add value to customer experience.

INDIAN LOGISTIC SECTOR
The Indian logistics sector is one of the largest in the world and presents a large addressable opportunity, with a direct spend of US$216 billion in Fiscal 2020. The sector is expected to grow to US$365 billion by Fiscal 2026 at a CAGR of 9%, driven by:

● Strong underlying economic growth 
● Favourable regulatory environment in logistics, resulting in evolution of efficient supply chain formats 
● Improvement in India’s transportation infrastructure, especially highway connectivity 
● Growth of the domestic manufacturing sector, driven by favourable policy support and increased domestic and foreign investments 
● Rapid growth of the digital economy, which has led to creation of digital-native business models such as ecommerce, direct-to-consumer and social commerce 
● Growth in offline commerce driven by increased offline consumption, industrial activity and cross border trade

The expansion of this industry is likely to be aided by a robust economy, government efforts to improve infrastructure, and a favourable business environment. Increasing consumerism and a huge consumer base are fostering the growth of retail and e-commerce in India. The Indian retail sector's market size is predicted to increase at a CAGR of 9% between 2019 and 2030, totalling more than US$ 1.8 trillion. Large international funds and corporations have invested in warehousing developers and operators to grow their reach and geographical footprint, which are the sector's key differentiators. The Government of India has taken many initiatives to strengthen the sector's infrastructure, including the establishment of dedicated freight corridors and the extension of road and rail networks, to improve connectivity and decrease travel times. Another critical governmental intervention has been the sector's digital transformation, projects such as Digital India, Bharat Net, and the National Logistics Portal would aid in the industry's digitization. Furthermore, the government has announced the establishment of logistics parks and warehouses across the country to provide appropriate storage facilities for enterprises. The warehouse sector has grown rapidly in recent years, fuelled by the expansion of e-commerce, solid infrastructure, the adoption of GST, and the advent of organized retail. The recently implemented National Logistics Policy intends to reduce India's logistics costs from the double digits of GDP to the single digits by 2030.

The Indian logistics industry is growing, due to a flourishing e-commerce market and technological advancement. The logistics sector in India is predicted to account for 14.4% of the GDP. The industry has progressed from a transportation and storage-focused activity to a specialised function that now encompasses end-to-end product planning and management, value-added services for last-mile delivery, predictive planning, and analytics, among other things. One of the key drivers of this expansion is projected to be the rise of India's logistics industry, which employs 22 million people and serves as the backbone for various businesses. The logistics sector in India was valued at US$ 250 billion in 2021, with the market predicted to increase to an astounding US$ 380 billion by 2025, at a healthy 10%-12% year-on-year growth rate. Moreover, the government is planning to reduce the logistics and supply chain cost in India from 13-14% to 10% of the GDP as per industry standards. 

The industry is crucial for the efficient movement of products and services across the nation and in the global markets. The logistics business is highly fragmented and has over 1,000 active participants, including major local players, worldwide industry leaders, the express division of the government postal service, and rising start-ups that focus on e-commerce delivery. The industry includes transportation, warehousing, and value-added services like packaging, labelling, and inventory management. With the advent of technology-driven solutions such as transportation management systems (TMS) and warehouse management systems, India's logistics industry has witnessed tremendous development in recent years (WMS). These solutions have assisted logistics firms in increasing operational efficiency, lowering costs, and improving customer service. As depicted in the below pie chart (left), representing the segment-wise breakup of the logistics sector in FY21. Roads have the largest percentage share of 73% followed by rail (18%), water (5%) and air (5%). The below pie chart (right) represents the fragmented structure of the Indian logistics industry.

The Indian logistics sector is valued at USD$ 150 billion, contributing 14.4 % of the country’s GDP. With the easing of FDI norms, the proposed implementation of GST, increasing globalization, growth of e-commerce, positive changes in the regulatory policies, and government initiatives such as “Sagarmala”, “Make in India”, the sector is expected to touch $200 billion by 2020. In the World Bank’s Logistics performance ranking 2016, India’s ranks have improved from 54 in 2014 to 35 in 2016, jumping 19 places. Out of this USD 150 billion logistics cost, almost 99% is accounted for by the unorganized sector (such as owners of less than 5 trucks, affiliated to a broker or a transport company, small warehouse operators, customs brokers, freight forwarders, etc.), and slightly more than 1%, i.e. approximately USD 1.5 billion, is contributed by the organized sector. However, the industry is growing at a fast pace and if India can bring down its logistics cost from 14% to 9% of the GDP (level in the US), savings to the tune of USD 50 billion will be realized at the current GDP level, making Indian goods more competitive in the global market. Moreover, growth in the logistics sector would imply improved service delivery and customer satisfaction leading to the growth of export of Indian goods and potential for the creation of job opportunities.

AFCOM HOLDINGS LIMITED STRENGTHS 
1. Their Promoters and management team are one of the most experienced in the airline cargo industry.
2. Well equipped to handle hazardous cargo
3. Large entry barriers into the industry
4. Training

AFCOM HOLDINGS LIMITED STRATEGIES
2. Growth through fleet expansion
3. Growth through Market expansion
4. Enhancement of Safety Standards /Quality
5. Improving operating efficiency
6. Leasing Partners

AFCOM HOLDINGS LIMITED RISK FACTORS & CONCERNS
1. Their top five customers contribute majority of their revenues from operations.
2. Their ability to attract, train and retain executives and other qualified employees is critical to their business.
3. A member of their Promoter Group, namely P Karthik Iyer Parasuraman is involved in legal proceedings involving SEBI and /or Stock Exchange and CBI.