Fast-growing Indian parcel operator DTDC Express plans to invest up to $100 million in its network over the next three years, has bought into an on-demand delivery firm and considering an IPO or other means to raise finances.
The privately-owned company expects to increase its turnover by 15% to some Rs 9.25 billion (€120 million) in the year ending March 2016 and grow by nearly 20% to Rs 11 billion (€145 million) in 2016/17, according to company executives.
DTDC executive director Abhishek Chakraborty told Indian media: "We will be investing US$80-100 million in network expansion, infrastructure and technology over the next three years.” He did not spell out details of the investment plans but indicated that about 60% is planned for organic growth while the rest could be available for acquisitions.
He said the company had sufficient funds to finance investment this year but would be looking for a capital infusion in 12-15 months’ time. DTDC was open to all options, including private equity and a public offering, he added. The Chakraborty family and other Indian shareholders own 60% of the company at present while DPDgroup owns a 40% minority stake.
The delivery company has also announced a ‘business transformation programme’ designed to make it into ‘India’s preferred express parcel service provider’, with a special consumer focus.
In one move, DTDC has invested US$1 million in a 20% stake in startup logistics firm Llama Logisol, which operates logistics IT solutions provider Shipsy. The one-year-old company uses big data for location intelligence, last mile delivery optimisation, and supply chain planning. In particular, its ‘Shipsy Now’ app enables on-demand deliveries of urgent small items in Delhi and the nearby high-tech town of Gurgaon.
Shipsy will use the investment from DTDC to strengthen its core technology infrastructure and build on the solutions that it offers, while supporting its growth and financial stability.
Chakraborty commented: “DTDC’s investment in Shipsy would go a long way in helping us adopt disruptive technologies in our future growth segments of e-commerce and e-fulfilment.”
Separately, DTDC has named former Indian cricket star and captain Sourav Ganguly as its ‘brand ambassador’ to promote the company publicly.
In the last few years the company, with more than 300 offices and some 6,000 franchisees, has set up an e-commerce logistics company named DotZot, bought a majority stake in a regional logistics company, and signed international partnerships with companies in the Middle East and China. DPDgroup acquired its 40% stake in the company for a reported €20 million in 2013.
