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LEAP INDIA LTD

Leap India Limited - Related Party Transactions

Introduction

Based on the RHP (Red Herring Prospectus) dated August 1, 2026, and subsequent filings, here are the “Related Party Transactions” (RPT) details of Leap India Limited.

Business Model Operations

Business Model: LEAP operates an on-demand asset pooling model ("share and reuse"), renting out pallets, containers, and Material Handling Equipment (MHE) to over 1,000 customers.


Raw Materials & Sourcing: Critical materials are timber and plastic. Timber is primarily sourced from Europe and Oceanic countries, while forklifts are procured from China.


Price Volatility: The company is exposed to volatility; timber prices rose during COVID-19 and Red Sea trade disruptions, while polymer prices fluctuated due to Middle East conflicts.


Customer Advances: The company held â‚ą11.13 million in advances from customers as of March 31, 2026.


Key Business Factors: Success depends on retaining large customers, maintaining asset utilization rates, managing capital expenditure for asset pool growth, and competing with local and international players.


Customer Concentration: In Fiscal 2026, no single customer accounted for more than 10% of total revenue. The top 5 customers contributed â‚ą1,405.66 million (approx. 19.3% of revenue).


Revenue Mix: The company's entire business operations are currently located within India.

Financial Performance Health

Sales, EBITDA, and PAT Trends:

  1. Sales: Increased from â‚ą3,649.71 million (FY24) to â‚ą7,295.33 million (FY26).
  2. EBITDA: Increased from â‚ą2,099.18 million (FY24) to â‚ą3,788.29 million (FY26).
  3. PAT: Increased from â‚ą371.74 million (FY24) to â‚ą623.41 million (FY26).


Margins: EBITDA margins decreased from 56.44% in FY24 to 50.69% in FY26. PAT margins fluctuated, ending at 8.34% in FY26.


Asset Turnover: Based on FY26 revenue of â‚ą7,295.33 million and total assets of â‚ą24,010.46 million, asset turnover is approximately 0.30x.


Indebtedness: Total debt increased significantly over three years, reaching â‚ą10,177.25 million in Fiscal 2026.


Return on Capital: ROCE (by EBITDA) was 19.06% in Fiscal 2026, down slightly from 20.33% in Fiscal 2024.


Cash Flow Analysis:

The EBITDA to CFO conversion is not increasing, decreasing from a high in FY25. FCF remains negative due to heavy investment in the asset pool.

Risks Management Outlook

Red Flags:

  1. Negative Free Cash Flow across all reported periods.
  2. High Related Party Transactions, particularly the â‚ą945.41 million PPE purchase from Plenova in FY26.
  3. Pledged Shares: 4.83% of pre-Offer capital was pledged (released for lock-in but subject to re-creation).


Legal Cases: There are 66 pending tax proceedings against the company involving â‚ą204.39 million. One criminal case is pending against a Director.


Growth Plans: The company aims to integrate the CHEP India acquisition, pursue inorganic growth, and expand internationally into the Middle East (LEAP MENA).


Government & Regulatory Landscape: Exposed to changes in labor codes, competition laws, and environmental regulations regarding timber.


Management Outlook: Management emphasizes that their business model is stable because assets are deeply integrated into customer supply chains, making switching difficult and costly. No explicit "structural vs. cyclical" commentary was provided.

Disclaimer

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