1 min read.Updated: 13 Jan 2020, 02:48 PM ISTBaiju Kalesh and P R Sanjai
Blackstone is expanding into logistics in India to tap the growing demand for warehouses
Introduction of GST has prompted demand for large storage spaces from retailers to ensure fast, last mile delivery of goods
Blackstone Group Inc. is nearing a deal to buy a stake in the warehousing unit of India’s Allcargo Logistics Ltd. for ₹380 crore, said people with knowledge of the matter.
Allcargo’s board is expected to approve the proposal on Monday, said the people, who asked not to be identified as the deliberations are private. The U.S. private equity firm could further raise its stake over the coming months based on the achievement of pre-agreed performance milestones, which could leave Allcargo with a minority interest, the people said.
A representative for Blackstone declined to comment, while a spokesman for Allcargo had no immediate comment. Shares of Allcargo extended their gains to as much as 5.4%.
Blackstone is expanding into logistics in India to tap the growing demand for warehouses as companies including Amazon.com Inc. and Walmart Inc. invest billions of dollars in the world’s fastest growing e-commerce market. The introduction of a nationwide tax regime has also prompted demand for large storage spaces from retailers to ensure fast, last mile delivery of goods.
Allcargo’s logistics division plans to build 5 million square feet of warehouses across India by 2021, the company said in a presentation in August. Consultancy EY predicted in a report last year that companies will invest $7.8 billion in warehouses in the South Asian nation by the end of 2020.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.