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Meru Cab Company plans to raise about Rs 350 crore to feed expansion needs and technology upgrades. India Value Fund Advisors, having over 80 per cent stake in Meru, might partly divest its stake once fresh funding deals are finalised. The Meru management and its chief executive, Siddhartha Pahwa, also have a stake.
In the midst of ongoing outrage against the recent assault of a woman in a taxi operated by another company, the company on Friday unveiled a ‘Meru Eve’ facility for female passengers. These are cab driven by women and it is starting these in this city, with 50 vehicles owned by Meru. The number is expected to grow to 2,500 in 12-18 months across the country.
At present, women are around 40 per cent of Meru’s total consumer base in India. Meru has 12,000 cabs, servicing about five million people. About half these vehicles are owned by it.
“Safety and trust are the key behind this move, but this market could be as big as Meru’s usual cab business. We are operating in 14 cities and want to touch 25 by December. We would need about $50 million. Discussions are on and could close sooner than what many anticipate,” Pahwa said.
He said IVFA could dilute its stake for a new investor but was is in no hurry to exit and would stay as a key investor.
Meru Cab Company also plans to hire technical engineers/experts to strengthen its technology base for better passenger service.
For 2013-14, it reported a first profit, of Rs 3.6 crore. In 2012-13, it had a loss of Rs 31.1 crore. As of March-end this year, the accumulated loss was Rs 215 crore.
India’s taxi market comprises 600,000 cabs and yearly revenue of Rs 11,000 crore. According to Valoriser Consultants, the sector has been growing at 20 per cent annually.
Pahwa said Meru would soon get Aadhaar-based verification of drivers across its fleet. The Mumbai-based company has already conducted experimentation of such a process.
