Evaluating an Indian road logistics company: a guide for investors and lenders

Road freight moves most of India’s goods, and it is run by a very wide range of businesses, from single-truck owners to multi-state operators. For a private equity fund, a bank, a debt fund or an investment banker, that range is the first problem: two companies with similar revenue can carry very different risk. This guide sets out the questions that separate them.

It is written for people doing early work on the sector. It is not investment advice, and it does not describe any transaction.

Nothing on this page is an offer of securities.

1. Fleet model: asset-light, asset-heavy or both

Asset-heavy operators own their trucks. They control capacity, vehicle condition and driver quality, which matters in cold chain and dedicated contracts. The cost is capital: loans against vehicles, depreciation, and the risk that trucks sit idle when demand falls. Ask for utilisation by vehicle, the age profile of the fleet and how vehicle loans are serviced.

Asset-light operators hire most of their capacity from truck owners and smaller fleets. They need less capital and can follow demand, but their margin is the gap between what the shipper pays and what the truck costs, and it can be thin. Ask how many distinct trucks were hired, how concentrated hiring is among a few suppliers, and how hire rates are paid.

Many established operators run both: an owned fleet for contracts that need it, hired capacity for the rest. In that case, diligence should split the economics of each rather than average them.

2. Customer concentration

Large shippers sign large contracts, so a few accounts often dominate a logistics company’s revenue. Check:

• the share of revenue and of profit from the top one, five and ten customers;
• how long each major relationship has run, and whether it has survived a retender;
• what the business looks like if the largest account is lost or repriced.

Profit concentration can differ sharply from revenue concentration. A big account can be thin-margin and a smaller one can carry the profit.

3. Receivables and working capital

This is usually where lenders spend the most time. A transporter pays for diesel, tolls, driver costs and truck hire within days. Large shippers pay on credit terms. The gap is financed by the operator, so receivables can be a large share of total assets.

Ask for receivables ageing by customer, the history of disputed and written-off invoices, the time from delivery to proof of delivery to invoice, and how the business funds the gap (bank lines, invoice discounting, own capital). A fast, clean proof-of-delivery process shortens the cycle directly.

4. Contract tenure and pricing

Look at how revenue is contracted: dedicated fleets on fixed-plus-variable rates, lane contracts with a fuel clause, or spot loads. Check the remaining term of major contracts, the renewal record, how diesel price moves are passed through, and whether contracts carry KPI-linked payments or penalties. A contract that looks long on paper but is retendered every year behaves like a short one.

5. Technology and data

Every operator now says it has technology. The useful test is narrower: can the company prove each trip? Ask for a sample month of trip-level records and check that bookings, vehicle placements, GPS movement, delivery proof and, for cold chain, temperature logs tie out to invoices and then to the audited accounts. Records that reconcile reduce disputes, speed collection and make every other diligence question easier to answer.

6. Governance

For a family-owned business, this is often the deciding factor. Look for:

• audited accounts with a clear statutory auditor history;
• a clear group structure, with each entity’s line of business and the related-party transactions between them;
• a board and the policies that sit behind it (code of conduct, anti-bribery, whistle-blower, related-party policy);
• registrations and statutory filings that are current.

Where figures are reported for a group rather than one company, make sure you know which entity each number belongs to.

7. How to run the diligence

1. Start from public records. Company filings, registrations and anything the company publishes with a stated method.
2. Sign a confidentiality agreement before asking for financials, contracts or customer data.
3. Test operating data against the accounts: a sample of trips, traced from booking to invoice to cash.
4. Visit branches and a working site, not only head office.
5. Speak to customers and truck suppliers, with the company’s consent.
6. Separate the economics of owned and hired fleets, and of each business line.

Approaching Safe & Secure Logistics

Safe & Secure Logistics is a private, family-owned limited company and a family institution in freight since 1951. It is not listed. It speaks with private equity funds, lenders and debt funds, and investment banks looking at Indian logistics, one to one and under a confidentiality agreement.

Its investors page shows operating figures with their basis and source, and publishes no forecasts. Audited statements, the consolidated group figure, the entity list and the asset register are shared through the data room, to a named contact:

1. You tell us who you are and why.
2. We confirm and send an NDA.
3. Access opens, with a named contact.

Request the data room →

Figures for Safe & Secure Logistics are for FY2025-26 from our booking register. How each one is counted is on the Facts and sources page.