SKIL Infra plans to invest up to Rs5,000 crore in the logistics segment  

June 9, 2010

 The Nikhil Gandhi-promoted entity has planned investments of around Rs5,000 crore in the logistics segment in the next five years

SKIL Infrastructure Ltd (SKIL Infra), which plans to come out with a public issue soon, is looking at investments of up to Rs5,000 crore in the logistics segment in the next five years. The group plans to emerge as a complete door-to-door multi-modal logistics company.

"We were the first private players in the Indian railway arena and now we plan to become a multi-modal logistics firm providing complete door-to-door services," said Nikhil Gandhi, group chairman and executive chairman, SKIL Infrastructure. The group was responsible for the first public-private project with the Indian Railways involving conversion of metre gauge to broad gauge.

The group plans an investment of around Rs1,500 crore to Rs2,000 crore in the next three years for horizontal expansion in the logistics segment. Going forward, it also envisages scope for vertical expansion investments of up to Rs3,000 crore.

"Horizontal and vertical (expansion) put together, there is an opportunity to invest up to Rs5,000 crore in the next five years," said Mr Gandhi.

Currently, the group is developing logistics facilities at two locations-Navi Mumbai and Jhansi. The facilities are being developed on the hub-and-spoke model. In the next five years, SKIL plans to have around 60 such hubs all over India.

Apart from developing these hubs, the group is also actively looking at the new rail freight privatisation schemes announced last week. Indian Railways had announced entry of private players in the freight terminal and train operations business through two schemes-PFT and SFTO. The private freight terminal (PFT) segment will allow private players to operate rail freight terminals, while the special freight train operator (SFTO) scheme facilitates private players to own and operate freight trains for movement of certain commodities. SKIL is closely pursuing both these schemes.

Mr Gandhi is optimistic over the growth prospects in the logistics segment.

"In the next ten years, this sector will grow from $80 billion (currently) to a market of $200 billion to $300 billion. There will be only 10 to 15 large players who will occupy around 90% of this space. Experience will help us become a strong player," he said.

The SKIL group soon plans to raise around $300 million through the initial public offer (IPO) route. A few months back, the group purchased a significant stake in Pipavav Shipyard from engineering giant, Punj Lloyd.

The group also plans huge expansions in the power and port sectors. Mr Gandhi in one of his earlier interviews (see http://www.moneylife.in/article/8/4585.html) to Moneylife had detailed plans for setting up thermal power capacity of up to 1,320MW. The company also plans two ports, one each on the western and eastern coasts. This infrastructure group is looking at partnerships with international players for its expansion plans. — Amritha Pillay