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GST effect: Allcargo plans logistics and industrial parks

P Manoj Mumbai | Updated on August 14, 2018 Published on August 14, 2018

Shashi Kiran Shetty, CMD, Allcargo Logistics

Sets up an asset management company to manage and maintain the facilities

Allcargo Logistics Ltd is setting up multi-modal logistics and industrial parks at five locations to tap opportunities from the consolidation of cargo distribution under the Goods and Services Tax regime.

On August 10, the board of Allcargo approved the plan to set up logistics, multi-modal and industrial parks.

“We want to be one of the early birds in this,” chairman and managing director Shashi Kiran Shetty told BusinessLine. Allcargo has set-up a wholly owned subsidiary, Allcargo Logistics and Industrial Parks Pvt Ltd, to manage and maintain the facilities at Bengaluru, Hyderabad, Nhava Sheva (near Mumbai), Jhajjar (in Haryana) and Nagpur.

It has hired Sandeep Chadha, a former partner at real estate-focussed private equity firm Milestone Capital Advisors Ltd to head the subsidiary. It has set up or is in the process of setting up separate subsidiaries or special purpose vehicles (SPVs) to develop the facilities. The land parcels owned by Allcargo will be transferred to these SPVs and used to leverage finance for construction. The company also plans to monetise some of its assets to finance the expansion.

“There is substantial interest from both domestic and international funds to finance the construction of the facilities,” Shetty said.

Logistics park

Construction of the Bengaluru multi-modal logistics park will start in September on a 100-acre plot near Whitefield. In Hyderabad, it plans to add 1,00,000 sq ft of warehousing space to the 60,000 sq ft already built on the Outer Ring Road with rail access.

At Nhava Sheva, close to Jawaharlal Nehru Port Trust, it has built 1.5 lakh sq ft of warehousing space and has plans to add more.

The construction of the Jajjhar facility, to be India’s largest logistics park, near Delhi will start in the next two months. It will be aligned with the dedicated freight corridor. It is connected to the nearby rail line at Farooqnagar.

“Jhajjar is located in an upcoming industrial area... lot of Japanese investments are coming there. It is already a big catchment area,” he said.

Nagpur is expected to be a national hub and the land there is also connected to a rail line.

These facilities will be developed to the requirements of customers with whom it will sign agreements for upwards of five years.

Allcargo hopes to raise ₹1,000 crore to finance the projects. “In the long-term, as we gain traction, we will look at developing more such facilities at another six locations,” he said.

Published on August 14, 2018
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