Financial Daily from THE HINDU group of publications
Thursday, May 05, 2005
Financial Daily from THE HINDU group of publications Thursday, May 05, 2005 |
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Corporate
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Venture Capital SIDBI Venture to pick up stake in Hertz India — Hertz charts out Rs 300-cr expansion plan Our Bureau
New Delhi , May 4 IN a bid to finance its expansion plans, car rentals company Hertz India has made a fresh issue of equity to SIDBI Venture Capital Ltd (SVCL). "SVCL would initially be making an investment of Rs 10 crore and may invest more in the future," Mr Rajiv Vij, CEO, Carzonrent India (the exclusive licensee of Hertz in India), said. "Further, the investment is at almost 11 times the face value of Carzonrent shares and is the largest investment by SVCL from their recently launched Rs 500-crore fund. This investment makes Carzonrent India one of the highest capitalised travel and tourism companies in India," Mr Vij added while not disclosing how much equity SVCL would be picking up. Hertz India is planning to raise its fleet of cars to about 5,000 in the next three years from the current 650. In addition, the company plans to introduce various services and increase the number of its outlets (including through a tie-up with HPCL petrol pumps) in order to enhance its presence to around 32 cities in India. "Our expansion plans over the next three years would require an investment of about Rs 300 crore. We may even look at tapping the capital markets through an initial public offering for the same," Mr Vij pointed out. The company, however, faces tough competition from the unorganised sector, which accounts for about 98 per cent of the 1,50,000 registered taxis in India. In value terms, however, the organised sector has a market share of 10 per cent. Hertz India is targeting to log a revenue of Rs 200 crore by 2008 as compared to Rs 50 crore at present.
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