VRL to go public in 2006

Vijay Sankeshwar, the Karnataka entrepreneur whose businesses stretch across such unrelated areas as road haulage and media, is likely to take his road transport company Vijayanand Roadlines public later this year.

The issue proceeds will be used to finance its expansion into new operations like the courier and small cargo business and geographies like the east and the north east. "I want to exploit the logistical opportunity the expanding Indian economy is offering," Sankeshwar said.

To expand, the company will acquire 2,000 vehicles over three years, with 600 trucks and buses at a cost of Rs 100 crore being acquired in 2006. The firm already has 2,000 vehicles (1,800 trucks and 200 buses) which have earned Sankeshwar a place in the Limca Book of Records for being the private operator owning the largest number of vehicles in India.

The expansion plans also involve setting up 20 mini transshipment hubs which will enable it to serve its corporate customers, which are both in consumer durables and non-durables, better through a hub and spoke setup.

Vijayanand Roadlines, of which Sankeshwar is chairman and managing director, clocked a turnover of Rs 280 crore in 2004-05 and a profit after interest and before depreciation of Rs 30 crore. It is targetting a turnover of Rs 350 crore in the present year and Rs 450 crore in 2006-07.

Group profitability and cash availability would have been higher but for the fact that Sankeshwar has invested Rs 50 crore in his media business which is likely to lose Rs 7 crore this year, bringing the accumulated losses in the media business to Rs 40 crore.

Sankeshwar's media flagship Vijay Karnataka, which quickly became the largest selling Kannada newspaper, overtaking its much older rivals from established media houses, earns a surplus of over Rs 2 crore a month. This is swallowed up by the loss incurred by the group English daily Vijay Times and the group's second Kannada newspaper Usha Kirana.

Sankeshwar also has expansion plans for his media business but not right now. He expects this business to stop losing money by the middle of this year. After that he plans to go to neighbouring states with publications in both regional languages and English.

"The media business is losing because the circulation of Vijay Times is rapidly increasing while ad support is small," explains Sankeshwar.

Vijay Times is presently number three in circulation among English dailies in the state and he expects to become number two once the ABC figures for July-December 2005 are known.