 "Carzonrent to sell stake in subsidiary Myles to PE firm")
Carzonrent said on Friday is was looking to divest stake in its subsidiary to raise funds for expansion. The car rental and self-drive car services provider is talking to private equity firms to raise $20-25 million (Rs 135-167 crore) for selling stake in Myles, a self-drive business venture.
Rajiv Vij, managing director and chief executive, Carzonrent India, said, “We have received investor interest in Myles and would be able to conclude a deal with a private equity company within the next three months.”
For this purpose, Myles would be spun off into a separate company, making it an independent entity. Controlling stake will remain with Carzonrent, which in turn is two-thirds owned by Vij and his family.
Myles is one of several self-drive services offered by companies including Avis, Zoomcar and RevvIndia to name a few. Demand for self-drive cars, which are available for little as Rs 75 per hour have found several takers in congested cities like Delhi and Mumbai.
Carzonrent claims demand for self-driven cars have registered robust growth in the past couple of years, with Myles alone clocking revenue of Rs 3 crore a month, up from under Rs 1 crore a month two years ago.
The funds raised through the sale of the stake would be used for upgradation of technology, customer acquisition and expanding franchise network. At present, Myles operates a fleet of 1,000 cars, of which 800 are owned by Carzonrent and the balance is franchised.
“We have invested Rs 50 crore in Myles as seed money. Now, it is time to grow the business,” added Vij.
The company believes its self-drive car business can grow to 50,000 cars by 2020 and hit a revenue of Rs 3,500-4,000 crore. Addition of new vehicles will be completely franchised, Vij said. “We have appointed a consultancy firm to help us form the new company and this process is expected to get over in one or two months. We have also formed a new management team for Myles whose job is to operate it and achieve set targets.”
Carzonrent also has two other verticals, a car rental service under the same brand and a cab service under EasyCabs. The firm runs a total of 10,000 cars across the three verticals. While 70 per cent of business is generated by the corporate sector, for the rental service EasyCabs is mostly to non-corporates.
SPINNING OFF
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Carzonrent talking to private equity firms to raise Rs 135-167 cr for selling stake in Myles
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Says would be able to conclude a deal with a company within the next three months
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Myles would be spun off into a separate company, making it an independent entity
In an earlier version of this article, Rajiv Vij, managing director and chief executive, Carzonrent India was wrongly mentioned as Aditya Vij. The error is regretted.
