The Hindu Business Line : Vijayanand Road Lines to raise Rs 300 cr, plans IPO

Bangalore, Aug. 20 Vijayanand Road Lines (VRL), the country’s largest private sector transport company, is gearing up for an IPO and has retained Edelweiss Capital as its merchant banker.VRL Chairman and Managing Director, Mr Vijay Sankeshwar, told Business Line that the company plans to raise up to Rs 300 crore from the market. “We plan to use the proceeds for expanding infrastructure for our various transport divisions,” Mr Sankeshwar said.

Earlier, Reliance Industries was said to be in talks with VRL for either a full buyout or equity participation. Mr Sankeshwar said that Reliance Industries was one of VRL’s largest customers but denied that they were in talks with the company for a full sell out or for equity participation. Reliance Retail is scouting for transport houses which can provide full logistic support for the company.

The IPO plans are part of a road map set out by VRL’s consultants who had asked VRL to exit its publishing business if it wanted to focus and expand its logistics business. VRL sold off its publishing business to Bennett, Coleman & Company, which owns the Times of India Group, in June last year.

Mr Sankeshwar said the money from the IPO will also be utilised for providing warehousing facilities for corporate multinationals and for setting up hub & spoke structure for the company. He had earlier said the company plans to set up 10 hubs and each of these require over 20 acres. VRL has already launched its cargo service for specific industries and plans to expand its operations soon. VRL has over 2,500 buses and trucks and has 100 branches across the country. In another year, it plans to increase the number of branches to about 300. Currently, 70 per cent of the country is covered through its existing branch network.

Mr Sankeshwar said VRL posted a turnover of about Rs 470 crore during 2006-07 and it had about 7 lakh customers in its fold. He said his company was also in talks with a few private equity funds that are most likely to pick up stake before the IPO. He said the company expects to post over Rs 1,000-crore turnover in another couple of years.