Logistics Landlord: The Horizon Industrial Parks IPO

The following article is for educational purposes ONLY. Each and every piece of information used henceforth in this article is sourced from the RHP.

Horizon Industrial Parks Limited is opening a 100% Fresh Issue IPO. Horizon is India's largest industrial and logistics infrastructure developer, owner, and operator by network size, developing and leasing Grade A+ warehouses, industrial facilities, and in-city logistics hubs across 10 cities, serving over 118 customers.

India’s total Grade A and Grade B warehousing and industrial space is at ~531.6 million square feet, and has grown at ~16% a year since 2020.

That total is still less than half of Chicago’s warehousing stock alone, ~1.3 billion square feet,

But the scene is changing rapidly. Grade A warehousing space in India is expected to grow at 25% a year between 2025 to 2030, projecting to reach ~944 million square feet by then.

Horizon Industrial Parks is India’s largest industrial and logistics infrastructure developer, owner and operator by network size.

They’re raising ~₹₹2,600 Cr through an IPO consisting entirely of a Fresh Issue of shares. Of the net proceeds, ₹2,250 Cr will go to repay debt.

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Horizon owns and leases industrial real estate. It holds 45 assets across 10 cities, totalling ~59 million square feet of leasable area, of which ~29 million is built and operational and the rest is under construction or at the planning stage.

It builds or buys Grade A+ warehouses, (built to modern global specifications), industrial sheds and in-city logistics centres, then rents them to companies that need space to store goods, run light manufacturing, or run last-mile delivery.

Tenants sign leases of five to ten years. Rents typically step up by 4.5% to 5% a year, or by 15% every three years.

In fact, rental income made up 84% of total income in FY26.

Horizon also sells a few extras like turnkey fit-out work for large tenants, rooftop solar power, on-site staff housing, and cold storage. They are also building a 115-key hotel at its Dobbaspet park in Bangalore.

Horizon served ~118 customers, and more than half of its committed network is let out to Fortune 500 companies.

• EBITDA Margin climbed by more than 17% from 62% in FY24 to 79% in FY26, due to a fast growing rented space driving revenue.

• Operating Expenses fell slightly from ₹6 to ₹4 per square foot from FY24 to FY26, as the total square footage drastically expanded.

• Revenue per square foot also increased from ₹16 in FY24 to ₹20 in FY26.

• Committed occupancy stayed above 89% in all three years, even as new space kept coming online, which suggests new supply is finding tenants rather than sitting empty.

• Customer Base also nearly tripled in two years, from 40 in FY24 to 114 in FY26.

• Operational Network more than doubled, from 12.22 msf in FY24 to 28.42 msf in FY26, as construction completed and acquisitions closed.

• Revenue from Operations nearly tripled in two years, from ₹229 Cr in FY24 to ₹691 Cr in FY26. The pace comes from Horizon adding leased space faster than it costs pile on.

• EBITDA Margin expanded from 62% to 79% over FY24 to FY26, and a bulk of the boost came in FY25. The Margin surge could flatten out if costs keep rising faster in the future.

• Loss After Tax widened every year, from ₹162 Cr in FY24 to ₹204 Cr in FY26, despite growing EBITDA Margins. Depreciation and Finance Costs both grew faster than EBITDA in absolute terms, so the business turned more Operating Profit but still lost money on the bottom line.

• Persistent losses: Horizon has lost money in each of the last three years. Finance costs and depreciation, both drove the losses, with Finance Costs alone being ~70% of total income in FY26.

• Heavy debt. Corollary to the massive Finance Costs, gross external debt stood at ₹6,884 Cr as of FY26, with a D/E ratio of 1.18x. Though some of the net proceeds will go towards repaying this debt, Horizon also intends to keep borrowing to fund new construction, and has already pledged most of its investment properties and lease receivables as security against existing loans.

• Geographic Concentration: Four cities, namely, Delhi-NCR, Chennai, Bangalore and Pune, produced 79% of proforma revenue in FY26. Losing a large tenant, or a shock to one of these four cities such as flooding, heatwaves or a change in local warehousing rules, could bury the bottom line further in the sand.

Horizon Industrial Parks is the largest industrial and logistics park operator in India by network size, and it is growing that network fast. But it has also lost money every year, though the gap between EBITDA and costs narrows each year.

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_{This content is based on publicly available information contained in the Red Herring Prospectus (RHP) and is intended solely for educational and informational purposes. It should not be construed as investment advice, recommendation or solicitation to invest.}

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_{Source: Red Herring Prospectus (RHP) of Horizon Industrial Parks Limited}