Wednesday, October 02, 2019

SpiceJet cargo arm set for IPO

Indian low-cost carrier SpiceJet has set sights on an initial public offering (IPO) of its one-year old cargo unit, driven by a burgeoning e-commerce market. SpiceXpress operates cargo services to Hong Kong from Delhi, Kolkata and the northeastern city of Guwahati, as well as domestic services to five Indian destinations.

SpiceXpress could be taken public within 12 months, although the size of the proposed capital-raising exercise has not been indicated. It is also unclear if banks have been mandated to lead the IPO.

In spite of India’s population of 1.3 billion people, the country is underserved by the air cargo industry. And there is a growing need for express shipping to serve online retailers, such as Amazon India and Walmart’s Flipkart. Past attempts to operate domestic freighter operations in India have proved difficult to sustain, with only Deutsche Post DHL’s joint venture Blue Dart, which has a fleet of six B757 freighters, offering service in addition to SpiceXpress. It operates four freighter aircraft, with six additional freighters scheduled for delivery by the end of the year.

India’s e-commerce market is expected to reach $84 billion and account for about 7% of the country’s overall retail market by 2021, according to a February report, Unravelling the Indian Consumer, jointly prepared by Deloitte India and the Retailers Association of India.
02/10/19 Jim Smith/Freight Waves
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