LEAP India IPO: Look before you LEAP
Dominant pooling franchise and debt reduction cannot offset the aggressive valuation for LEAP India
LEAP India, a ₹2,480-crore IPO backed by KKR, is set to go public on August 7-11. The company, 13 years old, owns pallets, reusable containers, and material-handling equipment, renting them to clients. With a 90% market share in India's pallet-pooling market, LEAP has expanded through acquisitions, notably CHEP India in January 2025.
This has resulted in an enterprise value of ₹7,700-7,800 crore, with FY26 EBITDA at roughly 20-20.5 times. The ROE in FY26 was 6.48%, and the business demands continuous capital expenditure. The IPO is dominated by promoter monetisation, with KKR's Vertical Holdings II accounting for 93% of OFS proceeds. Post-IPO, the promoter holding will decline from 90% to 55.4%.
Investors should note LEAP's acquisition-heavy growth, negative free cash flow, and modest RO ratios. The company's network of 1,000+ customers spans various industries, with high retention and pricing power. However, the valuation based on current metrics appears challenging to justify.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
