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Motilal Oswal Report
VRL Logistics Ltd. announced the sale of its bus division for Rs 2.3 billion to Vijayanand Travels Pvt. Ltd., an entity owned by the promoter group. The slump sale is being undertaken on the basis of an independent valuation obtained from Grant Thornton Bharat and has been executed at an arms-length basis. The transaction is subject to the receipt of requisite approvals.
As per the management, average revenue per passenger in the bus segment has been declining, while costs have been on a rise. VRL Logistics has been unable to pass on the cost increase to customers due to rising competition. The majority of its bus fleet is above nine years old and is due for replacement, which will require a higher capex.
VRL Logistics has seen a sharp drop in capacity utilisation of buses to 50% in FY22 from 60% in FY18. Due to the above-mentioned concerns and a weakening outlook, the management has decided to exit this business.
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