Future Logistics, a logistics and supply chain subsidiary of Future Group, a diversified conglomerate, is reportedly looking to raise $40 million (€27 million) through private equity placements.
The company, which specialises in providing logistics services related to the shipment of goods, will use the capital injection to set up warehouses across the country, the company's chief executive, Anshuman Singh, told the Economic Times. A part of the investment will also be used to set up the company’s transportation business.
Singh said that the company currently operates about 3.5 million square feet of warehousing space and is looking to increase its warehousing capacity to 10 million square feet by 2011.
He did not provide information on the timing of the investment, or whether the company is in talks with private equity funds at this point, however Hong Kong-based trade sourcing company Li and Fung Group, Spanish logistics and distribution operator Logista, and Chinese logistics solutions provider CMST are among those interested in acquiring a 15 percent stake in the company, Indian newspaper Mint reported.
A few private equity firms in India have made investments in the logistics or related sectors in the recent past. In April this year, growth capital firm Blue River Capital invested $12 million in Wilson Sandhu, a freight logistics company. Two months earlier, The Blackstone Group acquired a 10 percent stake in Allcargo Logistics for $60 million.
Other firms that either invest or are looking to invest in logistics companies include SIDBI Venture Capital's SIDBI SME Growth Fund, Rabobank's India Agri Business Fund and Quantum Equity Advisors' Q India Fund.
Reliance Capital, which has disclosed plans to raise a $1 billion fund for India, has also marked logistics as one of its target sectors for investments.
Future Group, through its financial services arm Future Capital, manages its own logistics fund, as well. The $350 million Indospace Logistics Fund, which saw a first close in the second quarter of 2008, invests in the development of industrial warehousing facilities across India.
Future Logistics could not be reached for comment.