In a bid to expand its ecommerce business, a Hyderabad-based express distribution and supply chain solutions provider, Gati Limited is planning to raise over INR 120 Cr. The decision was made by the Board of Directors of the Company at its meeting held last week.
The company in its filing to stock exchange said, “Fund raising not exceeding Rs 120 crore by way of issue of securities to Indian or Foreign Investors/QIBs/FIIs/Venture Capital Funds or any other category of investors in accordance with SEBI guidelines and subject to necessary approvals from statutory authorities and shareholders as may be required.”
Speaking on the future plans, Sanjeev Jain, CFO, Gati said that the primary objective of raising funds is to expand the ecommerce business and also for FCCB (Foreign Currency Convertible Debentures) settlement depending up on the final outcome of court process and RBI response.
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Headquartered in Secunderabad, Andhra Pradesh, Gati was founded by Mahendra Agarwal in 1989. It offers cargo delivery, distribution and supply chain management solutions in India. The company has more than 3500 employees and an annual turnover of $249 Mn covering 622 out of 626 districts in India.
Many of the logistics players have been beefing up the capital to take advantage of the booming ecommerce sector in the country. According to the Gurgaon-based consultancy Technopak, the $2.3 Bn Indian e-tailing sector will touch $32 Bn by 2020. But for this to happen, the logistics sector – the link between etailers and customers – must keep pace with the rate of growth in ecommerce.
Last year, Ecom Express had raised over $16.5 Mn from Peepul Capital. Another, Gurgaon-based Ecommerce logistics firm, Delhivery had raised $35 Mn from private equity firm Multiples Alternate Asset Management in 2014.