DRS to raise Rs 100cr

The DRS Group, Hyderabad-based Rs 200 crore logistics company, is raising Rs 100 crore from private equity investors as part of its second round of funding plans.

The company is in talks with a few private equity investors including an overseas investor from the US. It plans to use the money to fund expansion of its third-party logistics business.

Said A K Agarwal, director, DRS Group, "We are in the process of developing 2 million sft warehousing space for our third party logistics (3PL) operations. We have already completed 1.2 million s ft in cities like Bangalore, Hyderabad, Mumbai, Gurgaon and Chennai, and to expand it further we need additional money."

The group is in advanced stages of completing the second round funding and will announce it within this month. The company is planning to divest 10-12 per cent equity to raise Rs 100 crore, Agarwal told Business Standard.

In March this year, the DRS Group divested 20 per cent equity and raised Rs 100 crore from Kotak Mahindra Bank's private equity arm.

"We have utilised these funds for our expansion. Considering the huge demand from retail companies for warehousing space, we have stepped up our expansion and aim to develop at least 5 million s ft space in the next three years," he said.

The company provides 3PL logistics service to companies like Reliance Retail, Future Group, MRF Ltd, Hyundai Motors, Lifestyle and Aditya Birla Group among others.

Agarwal said the DRS Group is also foraying into three new business areas "" shipping, courier and railway cargo. It plans to acquire an existing company in each of these new areas to expand its business.

"We are in advanced talks with a Delhi-based Rs 40-crore shipping and air cargo company and hope to conclude the deal shortly. Our plan is to extend our reach to South Asia and European countries," he said.

The company is aiming at a growth of 75 per cent to touch Rs 350 crore turnover in the fiscal 2007-08.