High-profile aviation entrepreneur G. R. Gopinath has found a powerful business ally for his new cargo venture, with Mukesh Ambani’s Reliance Industries Ltd (RIL) making a modest but strategic entry into the logistics sector with a small investment in his firm, Deccan 360.
Billionaire Ambani is believed to have taken personal interest in the deal, which is an attempt by Bangalore-based Captain Gopinath after his visionary budget no-frills venture Air Deccan sold out in the wake of mounting debt in a recession-hit industry.
The quantum of investment and stake acquired has not been revealed. Both parties refused to divulge any financial details.
But according to agency reports and people familiar with the deal, RIL has invested $30 million (approximately Rs 135 crore) and has picked up more than 26 per cent stake in Deccan 360. This deal is likely to help the logistic needs of Reliance Retail, an RIL subsidiary.
Captain Gopinath denied suggestions that Deccan 360 would be RIL’s captive venture.
RIL will place two nominees on Deccan 360’s five- member board.
“The stake (picked up) is neither majority nor minority. It is above 26 per cent and below 50 per cent. I am holding the majority stake,” said Gopinath, chairman of Deccan 360.
“We believe that our collaboration with Deccan 360 will see a transformation in the logistics domain in India. I have full faith in Captain Gopinath and his team to make this a big success,” Mukesh Ambani said in a statement.
With 60 plus franchisees nationwide, Deccan 360 has set up over 80 service centres and eight surface hubs. It has eight freighter aircraft, besides 300 trucks and 850 vehicles nationwide servicing 50 cities.
It is setting up 50-acre hub near Nagpur which would be operational by December.