Mumbai: The Indian arm of private equity firm Fidelity International Ltd has invested $13.5 million (around Rs60 crore) in New Delhi-based Transpole Logistics Pvt. Ltd to take advantage of the rapid growth of the logistics business as Asia’s third?largest?economy?expands.
The move comes about a fortnight after private equity firm Warburg Pincus India Pvt. Ltd invested $100 million in Chennai-based warehousing company Continental Warehousing Corp. (Nhava Seva) Ltd, a unit of the NDR Group. Warburg Pincus India has deployed $2.5 billion in India.
“Fidelity (Growth Partners India) has invested in Transpole through an instrument that can be converted into equity at a later date,” said Sandeep Upadhyay, head infrastructure and logistics, Centrum Capital Ltd, which was the financial adviser to Transpole on the deal.“This investment would represent a significant minority stake in Transpole. The company is targeting an initial public offer by 2015, while intending to grow to a Rs1,000 crore company by sales in the next three to four years.”
Executives at Fidelity and Transpole were not available for comment. A media statement said Transpole is expected to post revenue of Rs350 crore in the current financial year and the funds raised from Fidelity will be utilized to expand operations in India and Singapore and build up a pan-Asia network of offices across South Korea, China, Hong Kong and Malaysia.
Transpole offers logistics services such as freight forwarding, warehousing, distribution, third-party logistics and advisory services.
The company plans to enter project logistics shortly, Upadhyay said.
“The Indian third-party logistics market is estimated to grow rapidly as customers increase the level of outsourcing, encouraged by the ability of... logistics companies to provide quality services,” wrote Gagan Seksaria, associate director, and Chandan Choubey, senior analyst, at consulting firm KPMG, in a logistics report released in December. “The inefficiencies—infrastructural and operational—in the transportation and logistics sector in India are leading to the emergence of new business models and paradigms.”