Car rental company Carzonrent (India) will invest up to Rs 2,000 crore to expand its business by launching its operations in nearly 50 in the next three years.
Under its expansion plans, the New Delhi-based firm will purchase about 23,500 cars to add in its fleet. "In the next three years, it will require us to invest Rs 1,800-Rs 2,000 crore to add new vehicles, setting up offices in new locations and strengthening the technology front," Carzonrent (India) managing director Rajiv K Vij said.
The company currently has a fleet of about 6,500 units of different types of vehicles, catering to the general public and various industries in 13 cities, he said, adding it has so far invested Rs 400 crore. "We are targeting to increase our fleet size to 30,000 cars in the next three years. It will further strengthen our leadership position in the market," Vij said.
He said the company may tie up with some associates to source vehicles, but most of the additional cars will be purchased during its expansion phase. When asked about the source of funding, he said the investment will be coming from internal accruals, existing private equity partners and debt from banks.
The company had earlier raised around Rs 80 crore from Sidbi Venture Capital, WestBridge Capital and BTS Investment Advisors, which together own about 32 per cent stake in Carzonrent.
"For our future investment, most of the amount will be infused through bank debt. However, we will require about Rs 120 crore from our end and the existing three PE partners will put in one third of that amount, while the rest will be internal accruals," Vij said.
Elaborating the company's expansion plans, he said: "There is massive opportunity to expand the organised car rental service. We see potential to start our business in another 49 cities. So, we are expanding in these cities over the next three years."
The company will set up shop in various cities, including Indore, Surat, Ranchi, Bhopal, Jamshedpur, Kanpur, Vadodara, Ludhiana, Amritsar and Jammu, he added.
On the back of its growth plans, Carzonrent (India) is aiming for a revenue of Rs 850 crore by 2015. It is expecting Rs 300 crore revenue in the current financial year.
Vij said the company will also increase headcount to about 800 people from 600 employees at present.
