Fidelity Investments International has taken a strategic stake in Transport Corporation of India(TCI), one of the country’s leading road freight and express transport groups. It is the latest
investment by a financial institution to fund the expansion plans of locally-owned players in thefast-growing Indian transport sector.The US-owned financial institute has picked up a 7% stake in TCI for 526 million rupees (EUR9.5 million) via a share issue. This will increase Fidelity’s stake in the company, which is listedon the Mumbai stock exchange, to nearly 10%. TCI had been in talks with several financialinvestors, according to Indian newspapers.
TCI vice chairman and managing director D.P. Agarwal said the company planned to invest aboutEUR 80 million in warehousing, fleet upgrading, IT systems and other measures. “With betterinfrastructure, enhanced service mix and customer centric focus, we aim to become the preferredsupply chain provider,” he commented.
In 2006/07 (ending March 31, 2007), TCI, with some 7,000 trucks and 1,100 owned branches,increased revenues by about 20% to 10.85 billion rupees (EUR 195 million). More than half itsrevenues came from low-margin freight trucking services.
Its fast-growing express service XPS increased revenues by 22.9% to EUR 47.4 million, thusgenerating about 24% of group revenues. XPS mostly competes with operators such as Gati andSafeExpress in the road express transport market but also offers air express and courier services.
