Deccan Cargo set to offload 25% stake

Deccan Cargo & Express Logistics is looking to sell as much as 25% stake to fund its day-to-day operations, founder G R Gopinath said on Friday.

The company, which aims to be the first dedicated cargo service in India, is wholly owned by Gopinath right now and has seen an initial investment of $25 million.

Operations are scheduled to begin on May 27 under the brand name ‘Deccan 360’ with the first Airbus 310 freighter.

Deccan plans to connect New Delhi, Mumbai, Chennai, Hong Kong and Dubai in the first phase.

Gopinath needs to raise another $30 million for expansion in the next 6-8 months and has already begun talks with potential investors.

In all, the service will use three Airbus A310 freighters (which have 35 tonne capacity each) and 3 smaller turboprop planes (4.5-5 tonne capacity each).

Deccan plans to establish a 100 acre warehousing hub in Nagpur, besides collection warehouses across the country.

India’s domestic express-cargo market is currently valued at about $625 million a year and is expected to grow at an annual pace of 20% over the next five years, chief executive officer Jude Fonseka said.

Deccan Cargo has forged tie-ups with the GMR Group for handling units at Delhi and Hyderabad airports. Its current employee strength of 150 will reach 500 soon.

According to Gopinath, his new venture will “touch 80% of the overall cargo business in India within two months of launch, since bulk cargo movement happens between Delhi, Chennai and Mumbai.”
Gopinath, who is credited with launching the country’s first low fare airline, Deccan Aviation, sold it to Vijay Mallya last year but still retains a minority stake in the airline (now called Kingfisher Red). Asked if he would like to sell the remaining stake in Kingfisher Red, he said, “The time is not right now. I want to wait for better valuation.”