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Business News/ Companies / Arshiya International eyes container train business, seeks licence

Arshiya International eyes container train business, seeks licence

Arshiya International eyes container train business, seeks licence


Mumbai: Logistics firm Arshiya International Ltd, which has committed to invest Rs3,000 crore in port-related infrastructure and special warehousing complexes in India and Oman, has decided to enter the business of running container trains across the country.

Ending the monopoly of state-run rail company Container Corp. of Indian Ltd or Concor, Indian Railways had opened up the container train operations to private parties in 2006. Including Concor, 15 players secured licences to run such trains and some of them have already started their operations.

“The entry into the container (trains) business aims at supporting free trade warehousing zones, or FTWZs, planned near Jawaharlal Nehru (JN) Port and Delhi," said Ajay S. Mittal, chairman and chief executive of Arshiya. FTWZs are special category special economic zones that enjoy tax incentives. “Our application to operate all container routes in the country is with Indian Railways. We will pay licence fees after our fund-raising programme (is complete). We will take services of existing players (container train operators) till we get the licence and infrastructure ready," Mittal said.

Companies have to pay Rs50 crore for securing a licence to operate all routes and Rs10 crore for select short routes. Companies including Adani Logistics Ltd, Reliance Infrastructure Engineers Pvt. Ltd (promoted by Anil Ambani) and Sical Logistics Ltd have won licences to operate container trains.

Arshiya International has committed an investment of Rs3,000 crore in two phases for setting up FTWZs in JN Port, Delhi, and Oman (West Asia).

“We have recently raised Rs97 crore via private equity placements. We have filed documents with capital market regulator for raising up to Rs350 through qualified institutional placements (QIPs) for expansion projects," Mittal said. QIPs enable companies to raise funds by selling shares to institutional buyers such as banks and investment houses.

Mittal added that the remaining funds would be raised through internal cash accruals and debt instruments.

The company also plans to enter the business of setting up cold-chain infrastructure to tap demand from restaurant chains, hotels and retail ventures. “We are in talks with leading cold chain players for a possible joint venture," Mittal said. Cold chains are required for storage and distribution of perishable goods, foods, and temperature-sensitive pharmaceutical products. About 30-35% of 134 million tonnes of fruit and vegetables produced by India are wasted due to lack of storage and cool chain facilities.

G. Raghuraman, a professor at Indian Institute of Management, Ahmedabad, and part of global advisory board of the company, said owning assets such as warehouse and rail infrastructure would help the company deliver effective logistics solutions.

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Published: 12 Dec 2007, 10:50 PM IST
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