La Poste’s express parcels subsidiary GeoPost is set to buy a 40% strategic stake in majorIndian courier company DTDC to expand its international operations and step up consolidation of the
Indian express industry.Indian media reported today that GeoPost planned to buy the 40% holding of financial investorReliance Capital, leaving company founder Subhasish Chakraborty and other shareholders with 60% ofthe company. None of the involved parties wished to comment.
However, the Economic Times and the Times of India cited an anonymous official as saying: “It’sa mutually beneficial partnership. GeoPost will get a foothold in the highly competitive Indianmarket that has high entry barriers and has most global players. DTDC will also get access toEuropean markets and new technology. This is a network-driven business so both stand to benefitfrom the partnership.”
The GeoPost move, which values DTDC at Rs 4,750 million (€66 million) according to thenewspapers, was notified in a submission to the Indian Foreign Investment Promotion Board lastweek. Reliance bought the DTDC stake in 2006.
GeoPost already entered the Indian market in 2009 with the creation of DPD Continental, a smalljoint venture with local partner Continental Air Express, which offered delivery services fromdepots in several major cities.
DTDC is one of the largest courier operators in India with more than 300 offices and over 5,800franchisees, and delivers some 120 million consignments a year. It had turnover of some Rs 4,250million and net profits of Rs 200 million in the year ending March 2012, according to thenewspapers.
Founded in 1990, Bangalore-based DTDC has also expanded its international activities through ownoffices, joint ventures and partnerships. In 2012, it acquired a 52% stake in UAE-based EurostarExpress to expand in the Middle East and set up a Chinese joint venture with Beijing-based AirDragon Freight to target the increasing trade between India and China.
Any GeoPost stake in DTDC would mark the latest stage in consolidation of the Indian expresssector which has mostly seen the acquisition of Indian-owned companies by large multinationals.Major transactions have included DHL’s acquisition of Blue Dart Express, FedEx’s takeover of AFLand Gati’s creation of an express joint venture with Japan’s Kintetsu. However, TNT Express quitthe market last year with the sale of its loss-making Indian road express subsidiary.
Other major players in the fast-growing Indian market include UPS Jetair Express, air expressfirms First Flight Couriers and Overnite, road express firm Safexpress and India Post, which aimsto expands its express parcels business.
