Fidelity acquires 7 pct in Transport Corporation of India for Rs 530 million
Fidelity Investments International has picked up a 7 pct stake in Transport Corporation of India (TCI), the Delhi-based express logistics company, for Rs 53o million. TCI will issue equity shares of Rs 2 face value to Fidelity Investments at Rs 105.25 per share, in accordance with Sebi guidelines for preferential issue.
Post-issue, Fidelity’s stake in TCI would increase to nearly 10 pct of the paid up equity. TCI’s executive director Vineet Agarwal said: “The amount raised will be utilized to fund the expansion of TCI, specifically for building capacity in the warehousing space and setting up information technology (IT) systems.” Earlier, in 2006, TCI had announced expansion plans requiring Rs 4500 million of investments in warehousing, fleet upgradation and expansion, shipping and IT systems.
TCI intends to raise another Rs 600-700 million through sale of equity in the following year. “Our plan was to raise almost Rs 1200 million in two stages through equity dilution. The first stage has been completed. We will raise another Rs 700 million within six to nine months,” said Mr Agarwal.
The company claims it has already invested Rs 1000 million for expansion in FY07 and would be looking at investing another Rs 2000 million in the current fiscal. The year 2007 has witnessed a number of private equity (PE) players — including IDFC, Kotak, SIDBI, Reliance Capital and now Fidelity Investments and Guggenheim Global Infrastructure (GGI) — locking their investments in the Indian transportation and logistics sector. Late last week, GGI, an affiliate of Guggenheim Partners, had picked up a 33 pct stake in Vikram Logistic and Maritime Services, a Karnataka-based transportation and logistics firm. The rising interest of PE players can be attributed to the government’s focus on improving the infrastructure in the country, and the growth in the manufacturing sector.
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