Arshiya Rail takes PE route to raise Rs 100 cr

MUMBAI: Arshiya Rail Infrastructure, a container rail service provider, has initiated discussions with private equity players to raise around Rs 100 crore by offloading 15-18% stake. The fund-raising exercise is expected to be completed by September-October, said the chairman Ajay S Mittal.

The proceeds will be utilised to part-finance the second-phase expansion of the container railway infrastructure project. A total of 30 rakes will be built in the just-begun first phase and 45 rakes will be added in the second phase at an estimated investment of Rs 1,600 crore.

���The entry into the container train business is aimed at supporting our free trade warehousing zone business, planned near Jawaharlal Nehru Port and in Delhi,��� said Mr Mittal.

Arshiya Rail Infrastructure, a wholly-owned subsidiary of the listed Arshiya International, provides customised railway services to large corporations. If Arshiya Rail mobilises the targeted amount, it will be valued at Rs 550-650 crore. The parent company Arshiya International's market cap is pegged at Rs 398 crore, as per Friday's close of Rs 69.90, and, according to its official: "Our book value is much higher than the market cap."

Arshiya International is into railway infrastructure, third-party logistics, trucking and warehousing. It posted a net profit of Rs 44 crore last year on a total income of Rs 400 crore. The Mittal family holds a 46% stake in the company.