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Transport Corporation of India (TCI), the biggest privately held integrated logistics company, is slated to invest anywhere between Rs 100-150 crore this year on purchase of a new ship, trucks and other utilities.
The Gurgaon-based company is in the process of getting a fourth cargo ship inducted into the fleet which already has three ships under its belt. The company is hopeful of the ship's delivery in the current quarter. An estimated Rs 40-50 crore will be spent on its acquisition, said a senior excutive of the company.
Vineet Agarwal, managing director, TCI, said, "We are should be spending about Rs 100-150 crore as capital expenditure this year though the final figure is yet to be decided by the company's board."
The company plans to fund the expenditure using internal resources and through debt. Presently TCI has a debt of around Rs 300 crore and a debt equity ratio of 0.65.
TCI, which has one of the largest truck fleets in India presently has 1,400-1,500 trucks in addition to around 5,500 trucks which it runs on limited contract basis. The company typically spends Rs 30-40 crore on acquisition on new trucks every year.
"This year's truck acquisition figure will be based on the pick up in demand in the market. We are ready to acquire more trucks if the market so demands", added Agarwal.
Further, the company has plans to develop a warehouse in Hyderabad which would act as a forwarding center. The company is awaiting necessary regulatory approvals to start operations at Hyderabad.
Last year the company, which is listed on the Bombay Stock Exchange, intended to infuse Rs 230 crore towards capital expenditure but spent only Rs 75 crore though there were no intentional cut backs on spending, according to Agarwal. Likewise it intended to spend 126 crore on hub centers and small warehouses including Rs 90 crore for the Hyderabad complex.
"We decided to sweat our assets better last year. Some of the scheduled investments including the purchase of a new ship did not happen, so that part of the spending will happen now", added Agarwal.
The company wants to focus on the eastern sea front for continued growth in sea cargo business. TCI Seaways, the water transport brand, returned with the highest operating margins for the company. TCI Seaways caters to the coastal cargo requirements for transporting container and bulk cargo from ports on the east coast of India to Port Blair in the Andaman and Nicobar Islands and further distribution within the islands.
The cargo largely consists of a variety of products including cattle, perishables and general goods to the islands. It usually ferries back timber, wood products, and betel nuts to the mainland from the Andaman. Also a substantial cargo relates to the defense equipment and movement of vehicles.
Moving forward TCI may look at opening the western sea front for further business opportunities though a more detailed decision on this is yet to be formed.
