Indian budget carrier SpiceJet plans to sell shares in its one-year-old cargo division, known as SpiceXpress, in an initial public offering (IPO) as e-commerce drives demand. SpiceJet would continue to own a majority shareholding.
SpiceXpress, could be listed on a stock exchange within 12 months, SpiceJet chairman Ajay Singh said in a Bloomberg interview. “We have a country of 1.3 billion people, one of the fastest-growing economies in the world, and we have very few air logistics players,” Singh told Bloomberg. “We think that there’s a good space for us.”
SpiceXpress currently flies to Hong Kong from Delhi, Kolkata and the Northeastern city of Guwahati, and operates domestic cargo flights to Hyderabad, Delhi, Mumbai, Bengaluru and Chennai.
SpiceJet is growing its logistics arm as demand for overnight shipping grows, fueled by online retailers in India, including Amazon.com and Walmart Inc.’s Flipkart. India is under-served at the moment, Singh says, with just SpiceXpress and DHL’s Blue Dart Express operating domestically.
SpiceXpress has four B737-800BCF freighters and expects to receive another six by the end of the year, Singh says. The carrier is also adding aircraft to its passenger airline.
E-commerce sales in India are forecast to more than double to USD 72 billion by 2022 from USD 32.7 billion in 2018, research firm eMarketer estimates. Amazon is aiming to dominate the last sizable market yet to be conquered by large networks of hypermarkets and supermarkets, pitting it against Walmart and the planned e-commerce venture of Mukesh Ambani, Asia’s richest man.