Why Bankrupt Logistics Firm Arshiya is Drawing Interest from Adani Port, JSW Infra & Others

Mumbai-based bankrupt supply chain and logistics infrastructure firm Arshiya Ltd appears to have caught the attention of India’s leading infrastructure and logistics giants. 

The publicly listed Arshiya, which went under insolvency resolution last year, has reportedly garnered interest from companies like Adani Ports and JSW Infrastructure for its assets. 

According to an Economic Times report, Horizon Industrial Parks, Transindia Real Estate Ltd, and Authum Investment & Infrastructure Ltd have also expressed interest in acquiring Arshiya Ltd. 

Arshiya’s Financial Troubles

Arshiya Ltd entered insolvency resolution in April 2024 following an order by the Mumbai bench of the National Company Law Tribunal (NCLT). The decision came after a petition by Punjab National Bank (PNB), which claimed Arshiya had defaulted on dues amounting to Rs 193 crore. 

PNB is not the only creditor. Arshiya Ltd’s lenders also include State Bank of India, Axis Bank, Edelweiss Asset Restructuring Company, and CFM Asset Reconstruction Pvt Ltd, among others. The company has total liabilities exceeding Rs 6,647 crore. 

According to Equitymaster, before defaulting, Arshiya’s revenue declined at a compound annual growth rate (CAGR) of 12.4% over the previous five years. By the end of the financial year 2023, its net loss stood at Rs 1.5 billion. 

In 2022, Arshiya demerged its railways business into a separate entity called Arshiya Rail Infrastructure Limited. However, that entity also went into corporate insolvency in March 2024. 

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Why Are Adani and JSW Infrastructure Interested in Arshiya?

While the firm may have a long history of financial woes, it still has a substantial amount of physical assets. Arshiya Ltd was India's largest private container train operator with pan-India operations and the only free zone developer operating two free trade warehousing zones (FTWZ). Its FTWZs – Panvel near Mumbai, is spread over 165 acres, and Khurja, Uttar Pradesh, is spread over 325 acres.

The firm's website says both are well connected by rail and road networks, and co-located with domestic distriparks, which facilitate duty-deferred hubbing opportunities. Arshiya Ltd also owns the only private inland container depot (ICD) with six rail loop lines.

Meanwhile, both Adani Port and JSW Infrastructure have been spreading their businesses through acquisitions. Last year, JSW Infrastructure acquired a 70.37% shareholding in Mumbai-based Navkar Corporation for around Rs 1,012 crore, marking its entry into the logistics sector. Meanwhile, Adani Ports and Special Economic Zone (APSEZ), India’s largest private port operator, bought a majority stake in an offshore supply vessel firm, Astro Offshore, in a deal worth around Rs 1,551 crore.