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| VRL defers Rs 200 cr expansion |
| Mahesh Kulkarni / Chennai/ Bangalore Mar 20, 2009, 00:06 IST |
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Bangalore-based transport tycoon, Vijay Sankeshwar, chairman and managing director, VRL Logistics Ltd, has deferred Rs 200 crore expansion plans for his road transport business.
The decision comes after the postponement of its initial public offer which was scheduled to hit the market in November 2008, owing to negative investor sentiment.
VRL Logistics Ltd, among India’s largest road transport operators with 2,650 commercial vehicles which includes 170 buses in its fold, is however, going ahead with a limited expansion of its truck and bus fleet. It is adding another 100 trucks and 40 buses during the first quarter of next fiscal at an investment of Rs 35 crore, Vijay Sankeshwar said.
“Early last year, we had planned a massive expansion which included procurement of buses and trucks, construction of warehouses at major cities like Bangalore, Bijapur, Chennai, Delhi, Gadag, Hyderabad and Solapur among others. We had also bought land in these cities to open warehouses and to fund this expansion we had planned to raise Rs 200 crore from the public through an initial public offer. We had even filed a draft red herring prospectus with Sebi and got their clearance. However, due to the sudden fall in stock markets and negative sentiment we postponed our issue for an indefinite period,” he told Business Standard.
To cater to the growing demand, the company is buying 100 trucks and 40 buses from Ashok Leyland in the first quarter starting April 15, 2009. The funds are being pumped in from its internal accruals and bank loans, he said.
In addition to this, it also aims to add 40 light commercial vehicles. It is planning to commence additional cargo service to major cities in the states of Bihar, Gujarat, Punjab and Uttar Pradesh during the next financial year. During 2009-10, VRL aims to open at least 5-6 branches mostly in northern and eastern India, he said.
Sankeshwar said the economic slowdown has not had any negative impact on the company’s business till now and for the year ending March 2009, the company’s business will grow on expected lines of 20 per cent to touch a turnover level of Rs 650 crore.
“The slowdown has not made any adverse effect on our business this year and we don’t see any major impact next year either. We will continue to maintain at least 20 per cent growth in next fiscal as well,” he added.
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