Mumbai: Aegis Logistics plans to spend as much as Rs2,000 crore over the next 5-7 years to set up new port projects across the Indian coast to service oil companies and build a new revenue base, a top official said.
Aegis Logistics provides logistics support to oil, gas and chemical industries.
The firm will invest Rs430 crore to set up two oil terminal complexes, one at port Pipavav in Gujarat and another in port Haldia in West Bengal, managing director and CEO of Aegis Anish Chandaria said.
Aegis has signed an agreement with Gujarat Pipavav Port Ltd to sub-lease about 100 acres of land to set up a 600,000 kilo litre oil terminal complex at Pipavav port.
This facility will be set up over a period of three years, Chandaria said.
Aegis is expecting operating profit between Rs800 crore and Rs100 crore from the two projects in Pipavav and Haldia after 3 years, Chandaria said.
Aegis is currently building a 80,000 kilo litres oil terminal complex in Haldia port, he said.
It also plans to expand capacity at another facility in Kochi by about half from the current 55,000 kilo litres, he added.
These facilities will service oil companies who wish to use the port for import and export of oil and petrochemical products.
“There is a global boom going on for oil storage facilities. Many companies need access to onshore storage,” Chandaria said.
He said India was still a very small player in the global oil storage market which is expected to grow at 5-7% annually.
India’s oil storage capacity in the private sector stands at about 3.8 million kilo litres compared to Singapore’s 16 million kilo litres.
Necklace of Terminals
Aegis, which presently has three operating port terminals, two in Mumbai and one in Kolkata, is looking for similar port projects in southeastern and south-west India.
“To complete a necklace of terminals around the Indian coast,” Chandaria said.
It plans to increase its capacity to over 1 million kilo litres from the current 300,000 kilo litres by adding Pipavav, Haldia and Kochi projects.
To finance these new projects the firm intends to raise funds both via equity and debt.
Chandaria said Aegis expects to launch a qualified institutional placement within the next few months and raise Rs100 crore. Centrum and Motilal Oswal are the lead managers handling the share sale, Chandaria added.
Aegis also plans to borrow from the International Finance Corp (IFC) and also from other overseas lenders.
Upto 60% of the total Rs2,000 crore would be financed by various equity instruments and the rest via debt, Chandaria said.
Shares of the company ended up 0.04% at Rs350.2 in a weak Mumbai market.