The man who revolutionised aviation in India with his low-cost airline, Air Deccan, is set for a new beginning in the cargo and logistics space.
Capt G R Gopinath is planning to raise $50 million through private equity to part-fund his $200 million cargo venture. Confirming the move, Gopinath told TOI that Mumbai-based investment banking firm Edelweiss Capital has been asked to seek investors. Gopinath owns 100% of the company, Deccan Cargo, which he plans to build as “an end-to end express logistics service provider delivering cargo to one's door step”. The business will include ground logistic services via road and rail similar to that of global giants FedEx and UPS.
Earlier he had told TOI that he would also look at selling his stake in Deccan Aviation to fund the cargo business. Gopinath holds a little over 8% stake in Deccan Aviation, which after the merger with Vijay Mallya owned UB Group's Kingfisher Airlines would be called Kingfisher Airlines.
Gopinath is also pumping in over $25 million in setting up a state-of the art integrated IT system that would help in delivering cargo anywhere within 24 hours and help to cut operational costs. A track and trace mechanism will be put in place. IT major Infosys is believed to have been awarded the contract to design and implement the technology for Deccan Cargo. Gopinath declined to comment.
“We are looking at a backward integration of our suppliers' supply-chain inventory in to our warehouse inventory. We will maintain their inventory and will distribute it as and when required,” said Gopinath.
On Wednesday, Gopinath signed a memorandum of understanding with the Maharashtra Airport Development Company to set up a warehousing facility over 50 acres of land at the B R Ambedkar Airport in Nagpur. He will be spending close to $100 million in setting up this facility.
“The objective of having a central warehousing facility at the airport close to the runway is that it will help bring down distribution costs making it more cost effective and cost efficient,” said Gopinath. Nagpur will be the cargo hub of Deccan Cargo from where 40 cities across India will be serviced by 10 Airbus A310 cargo aircrafts.
Australian-Sri Lankan Jude Fonseka, who has had 21-years of experience in FedEx, is the company CEO. About 60 other people have been hired.
Source: Times of India