India's cargo carrier SpiceXpress plans IPO, hopes to list within year
INDIAN budget carrier SpiceJet plans an initial public offering (IPO) of its logistics business, banking on the growth of its role in the booming e-commerce sector, reported Bloomberg
INDIAN budget carrier SpiceJet plans an initial public offering (IPO) of its logistics business, banking on the growth of its role in the booming e-commerce sector, reported Bloomberg.
US research house eMarketer estimates e-commerce sales in India may double to US$72 billion by 2022 from $32.7 billion in 2018. Amazon aims to dominate, and is pitting itself against Walmart and the projected e-commerce venture of Mukesh Ambani, Asia's richest man.
It is hoped that SpiceJet's cargo division, SpiceXpress, will be listed within 12 months, said SpiceJet chairman Ajay Singh, adding that the business would still be owned by SpiceJet.
'We have a country of 1.3 billion people, one of the fastest-growing economies in the world, and we have very few air logistics players,' he said. 'We think that there's a good space for us.'
The no-frills carrier is expanding its nascent cargo-hauling arm to fill the growing need for overnight shipping services, fueled by online retailers such as Amazon and Walmart's Flipkart.
Mr Singh said India is underserved at the moment with just SpiceXpress and Blue Dart Express as the country's major air freight providers.
SpiceXpress has four freighters and expects to receive another six by the end of the year. That comes as parent SpiceJet adds new commercial jetliners to its fleet to support growth in the main business of passenger air travel.
SpiceJet started a dedicated freighter business last year, aiming to ship everything from electronics and food to clothes and letters. A cargo business provides some sort of a cushion in a cut-throat Indian market, where passenger fares are often not enough to cover costs.
SpiceXpress currently flies to Hong Kong from Delhi, Kolkata and the northeastern city of Guwahati, and operates domestic cargo flights to Hyderabad, Delhi, Mumbai, Bengaluru and Chennai.