Elbee plans Rs. 2,000-mn expansion programme

Kolkata: Elbee Express, the Mumbai-based express delivery company with countrywide network, announced on Monday Rs. 200 crore expansion plan.

“The thrust of the expansion plan will be to expand network, build up infrastructure and strengthen technical support to our business,” Mr Nikhil Shah, Executive Director of Elbee, told Business Line.

“Within the next few months, the number of our branches will nearly double to 250 from the present 132,” he said. The company in partnership with Airtel introduced live tracking system to provide information on real time basis.

Part funding

According to Mr Shah, expansion would be funded partially by Clearstone Venture Mauritius, the international arm of the US venture capital firm Clearstone Venture Partners, and Mr Rakesh Jhunjhunwala, an equity investor. Together they would put in Rs 25 crore with an equal amount from the present promoters. However, Clearstone Venture and Mr Jhunjhunwala along with Kotak Mahindra Investments, which was already having stake in the company, would be minority shareholders.

“The company’s board may be expanded to induct Mr Rahul Khanna of Clearstone Venture Advisors and Mr Jhunjhunwala,” Mr Shah said.

Focus

Asked if the company was planning to tie up with any foreign major in express delivery, Mr Shah replied that the focus would be on the domestic segment. Quoting from an AC Nielsen study instituted by the Express Industry council of India, he said the courier industry was estimated to be Rs 6,200 crore and was expected to grow at 25 to 35 per cent over the next five years. One per cent GDP growth would result in 2.5 per cent growth of express delivery industry.

“We would like to see ourselves emerging as India’s number one the express delivery company in next five years,” he said.

Eye on China

He, however, indicated that Elbee had before it a proposal for entering into the Chinese market, most probably with a Chinese firm. Quoting from a study by Booz Allen Hamilton, he pointed out that China’s express industry size is over Rs 25,000 crore with 40 per cent plus growth.