G.R. Gopinath in New Delhi on Friday. (AP)
New Delhi, May 8: Budget airline pioneer G. R. Gopinath may sell around 25 per cent stake in his Deccan Express Logistics to Singapore Cargo.
Deccan Express will commence operations from May 19 under the brand name Deccan 360.
It will offer a door-to-door freight and cargo service, globally, and have its own fleet of aircraft. Deccan Express has an Airbus A310 and will have two more aircraft next month. The service was formally launched today.
The company (Deccan Express) is right now 100 per cent mine and I have invested $25 million in it, said Gopinath, who had set up the countrys first budget airline Air Deccan, which later got merged into Vijay Mallyas Kingfisher Airlines.
Gopinath, who is also the chairman of Deccan Aviation, which offers chartered services, said he would sell a stake in the logistics venture only when the market improves and valuations are higher.
The company is likely to require about $30 million in the next six months as working capital, he said.
Sources said Deccan Express was close to tying up funds worth $55 million from three players — Singapore Cargo, IBM Ventures and Intel Capital — to kickstart the service.
The cargo carrier will initially cover Delhi, Chennai, Hong Kong and Dubai, targeting segments such as automotive spare parts, textiles, pharmaceuticals, machinery and heavy equipment, banking and organised retail.
The company will also provide ground logistics services. It plans to deploy its own trucks and set up a warehousing hub in Nagpur.
Deccan Express has also tied up with the GMR group to set up cargo facilities at the Delhi and Hyderabad airports, which along with the Nagpur hub, will form an extensive storage, transportation and delivery network.
Deccan Express will be pitted against the likes of Blue Dart, Gati, TNT Express and First Flight in the domestic cargo and logistics market.
This market is witnessing rapid growth and if Deccan Express proves its potential, it might pose a stiff competition to established players in three years, an industry analyst said.