Port to profit: Allcargo founder Shashi Kiran Shetty shares his life story

Shetty, the logistics leader who lives where Rajesh Khanna once did, takes Dev Chatterjee through his life that started at the docks, with some cinematic stopovers

When Shashi Kiran Shetty, founder and chairman of Allcargo Group, suggested we meet at his home for breakfast, I happily agreed. His home, Aashirwad, is after all the most storied address on Carter Road in Bandra, Mumbai. Until 2014, the sea-facing property belonged to Indian cinema’s first superstar – the enigmatic and, in later years, reclusive Rajesh Khanna.

Khanna had bought the bungalow in the 1970s from another box office favourite, Rajendra Kumar, whose commercial success had earned him the moniker “Jubilee Kumar”. In the ’50s, yet another leading actor of his time, Bharat Bhushan, best known for his portrayals in Mirza Ghalib and Baiju Bawra, owned the two-storey bungalow.

After Shetty acquired the 6,500 sq ft property, two years after Khanna’s death in July 2012, he decided to demolish it to build a 10-storey family home. This caused quite an uproar.

The Aashirwad I walk into is now a modern building with an eight-foot boundary wall and high security. The old-world charm is lost. Like formula films, the space has got a formulaic treatment. This has been the fate of several of Mumbai’s old bungalows, which are being torn down to make way for glass and steel buildings. The city’s nouveau riche appear to prefer functionality over nostalgia.

Will I find anything reminiscent of the Rajesh Khanna era here, I wonder.

I am in for a surprise. A part of the house, designed by the artist Atul Dodiya, has paintings and pictures that pay homage to Khanna. “They depict his life and struggles in the industry,” says Shetty, 66, as we settle down for home-cooked breakfast starting with millet upma and khandvi, a savoury snack popular in both Gujarati and Maharashtrian cuisine. Some of the paintings on the ground floor recall Khanna’s cinematic journey, including his iconic dialogue from Amar Prem (1972): "Pushpa, I hate tears.”

Shetty, who bought the bungalow for Rs 95 crore from the Khanna family, says the superstar’s son-in-law, the actor Akshay Kumar, negotiated the deal. “We decided to redo the house since it was in bad shape; the construction was old,” he says. “Besides, we wanted a modern high-rise with better views and facilities.” The redevelopment took four-and-a half years.

Shetty, who prefers to keep a low profile, came to Mumbai in search of work in 1977 after graduating in commerce from Bantwal, a town in Karnataka’s coastal district of Mangaluru. Today, his group includes four listed companies, which posted revenues of Rs 20,616 crore in the last fiscal year (2022-2023), with a net profit of Rs 706 crore. He expects to close this fiscal with better financial metrics.

Fate, he says, is what brought him to Mumbai. His father, who was active in politics, expected to contest the state election from Bantwal on a Congress ticket. “But another candidate got the ticket, which ended my father’s political career,” he says. “Our family business wasn’t doing well either.”

Shetty toyed with the idea of going to West Asia, but instead came to the Mumbai suburb of Kandivali, where his sister lived. “A family friend introduced me to a shipping agency. That’s how I got into the shipping and logistics business on a salary of Rs 400 a month,” he says.

Coming from a small city, he had never seen ships as large as those docked in Mumbai ports – “or talked to foreigners or even entered a five-star hotel. I just fell in love with the shipping business,” he says as we dig into omelette and dosa.

Within two years, he joined Patvolk – then a Tata group company, which later merged with Forbes Gokak. His salary was now Rs 1,800. Patvolk served as an agent for global carriers. “Here, I learnt about corporate structure, bureaucracy, brand value and how a blue-blooded company works,” Shetty says.

Armed with this knowledge, he decided to sail into uncharted waters, and launched his own company: TransIndia Freight Services. With his savings of Rs 25,000 and help from relatives, he bought a forklift to rent it out. “I also decided to move goods from ships to warehouses within the Mumbai port.” This was in 1983. He was 25. “I would borrow trucks from friends and unload ships, ensuring that the vessels were turned around in time.”

Rather than wait for trucks from transport companies, his firm soon started buying its own trucks, which helped it to move goods faster from ships. With the government offering 40 per cent tax benefits as depreciation, it made sense to buy trucks, Shetty says. By 1992, the company owned a fleet of 100 vehicles, cranes and stackers, and was making profits. “Once a ship docks, it is a do-or-die situation. We have to unload the ship fast. Having our own fleet helped.”

Shetty now ventured deeper into the shipping business by representing Belgian firm AMI, which wanted to set up a base in India. The company was named Allcargo Movers India. In 1997, AMI called Shetty to Brussels, ostensibly offering to buy 70 per cent of the Indian company. In effect, it was a “take it or leave it” offer, which prompted Shetty to look for a new partner. 

He zeroed in on ECU Worldwide, a European shipping company seeking representation in India. Shetty would handle their containers and also generate business since containers were being increasingly exported from India. This partnership flourished, leading to joint ventures in Dubai and Singapore to expand the businesses in West Asia and South Africa, he recounts as we take a helping of gur poha (flattened jaggery rice)

In 2003, ECU faced financial woes, and Shetty feared losing his business. So, he bought a minority stake in ECU in 2005 for $12 million, with the option to increase it to 50 per cent, ensuring his position. Under Shetty’s leadership, ECU streamlined operations, sold non-core businesses, and expanded globally – to the US, China, and Europe. Joint ventures in South Korea and Japan further boosted its growth.

Shetty now commissioned Tata Consultancy Services to develop ECU360, a comprehensive IT platform to revolutionise logistics. Today, with 5,500 employees worldwide, this IT backbone has made ECU the industry leader, offering seamless cargo booking and delivery across 4,000 trade lines, akin to an “Amazon of shipping,” he says, taking a sip of his tea.

Meanwhile, in India, a new opportunity emerged when the Jawaharlal Nehru Port Trust (JNPT) in Navi Mumbai sought to move cargo out to container freight stations (CFS). But there was no land available to set up CFS. In 2003, land near JNPT cost a whopping Rs 4 crore per acre. Shetty secured 20 acres just beyond Cidco’s limits for Rs 10 lakh per acre. (Cidco was the Maharashtra government corporation tasked to develop Navi Mumbai land.) He then sold a 6 per cent stake at an enterprise value of Rs 1,000 crore to a private equity firm to fund the CFS venture.

The CFS business was a huge success. “I started investing to build more CFS in Chennai, Mundra, Kolkata and New Delhi (through a joint venture with Concor, or the Container Corporation of India),” Shetty says. The group also acquired a CFS outside JNPT, and now operates two here.

Diversification into warehouses followed. A 100-acre warehouse near Delhi was leased and later sold to Blackstone for Rs 750 crore. In the contract warehousing segment, warehouses in Bengaluru and Hyderabad were established and sold. Flipkart, Amazon, and Decathlon also acquired warehouses from the group.

In 2018, the group targeted logistics firm Gati for acquisition, revitalising it through capital infusion and participation in the Indian government’s tax resolution scheme, Vivad se Vishvas. The company cleared its debts, becoming debt-free post an income tax refund.

December last year saw Allcargo Logistics and Allcargo Gati restructuring, demerging the international supply chain business into Allcargo ECU, while express and contract logistics businesses consolidated under Allcargo Logistics. This move aimed to enhance operational efficiencies and simplify the corporate structure, eventually leading to four listed entities within the Allcargo Group: Allcargo ECU, Allcargo Logistics, Allcargo Terminals, and TransIndia Real Estate.

“After selling off businesses and making acquisitions, the group has achieved zero net debt as of March 2024. We rely on our own cash reserves, having exited asset-heavy ventures,” says Shetty, who exercises for 90 minutes daily and golfs on weekends.
 

As the group streamlines its complex structure, Shetty focuses on succession planning. His son, Vaishnav, leads digital transformation, while his daughter, Shloka, prepares to join the business after working at the family office.

“All companies have professional management with managing directors, while I chair two boards,” Shetty explains. “I provide strategic direction, oversee M&As, senior hires, succession planning, technology upgrades, culture building, and risk management.”

In October, after his four-year term as chair of Indian Institute of Management Mumbai ends, he hopes to do something in the field of education or set up a cancer hospital. “This year is hectic though, but next year, I’ll devote more time to social causes,” he says. On that note, we wind up our conversation.

As I leave, I’m struck by the parallels between the man and his mansion – both embodying resilience, reinvention, and the enduring spirit of enterprise that is etched in Mumbai’s narrative.