V-Trans (India) plans five-fold expansion in warehousing portfolio over three years

V-Trans (India) plans a five-fold expansion in its warehouse portfolio to more than 5 million square feet in the top 40 cities of India over the next three years, as it expects a major boost to business from the government’s recently announced National Logistics Policy.

The company plans to invest more than Rs 100 crore to execute the expansion, chairman Mahendra Shah said.

"The Indian logistics sector is witnessing a much-needed push from the government, including the recent announcement of the National Logistics Policy. Out of all the strategic and aspirational initiatives in the policy, we are most excited about the difference that multi-modal logistics parks will bring in," Shah said. “This will give a good boost to the warehousing sector.”

According to him, companies with a progressive mindset, technological inclination, and competitiveness will be immensely benefited in years to come owing to this government initiative.

The company is currently present in 25 cities out of the 35 where the government has announced plans to set up multi-modal logistics parks under the Bharatmala Pariyojana.

"The demand for warehousing is rising, and there is tremendous scope for growth. This is one of the reasons why we have envisaged five-fold growth in our warehousing business in the next three years. As a business unit, our focus is to build integrated solutions and offer third-party logistics (3PL) solutions to clients," said executive director Ronak Shah.

According to him, the company has the internal strength to make different solutions available in-house, which can be harnessed as it moves forward. It is moving towards having half the revenue coming from warehousing and the second half from other services, he said.

V-Trans is planning to fund expansion through internal accruals and financing from commercial banks. To limit the investment in land, it is planning to enter into long-term (for 10–15 years) lease agreements with landlords instead of purchasing land.

Under this model, the company will provide the design and exact specifications to the landowner, who will be responsible for the construction of the built-to-suit warehouses.

V-Logis, the warehousing and integrated logistics business of the company, is planning to focus on modern, multi-tenanted specialised warehouses for the chemical industry. It recently opened a similar warehouse in Bhiwandi, near Mumbai, and plans to build more such facilities in key consumption centres such as Gujarat, Delhi, Chennai and Bengaluru. In addition to the chemical industry, the company will also be focusing on other key segments such as ecommerce, automobiles and last-mile connectivity.

V-Trans has a presence across the country with over 1 million sq ft of warehousing space capacity, more than 850 branches and a fleet of over 1,500 advanced trucks with GPS-tracking facilities. With its hub and spoke model, the company handles over 2.2 million tonnes every year from diverse industries and across geographies.

The warehousing and logistics segment of real estate, which has emerged as relatively immune to the shocks of Covid-19, is expected to gain further strength and attract more investment in the next couple of years.

In India, a favourable regulatory environment, along with the government’s support through policy and reforms, has started to boost spending on infrastructure and, in turn, the overall demand for modern warehousing.

The warehousing sector is expected to record the highest ever absorption of space this year due to the aggressive expansion of e-commerce and the growth of third-party logistics companies.