Chennai: The country's largest non-banking finance company Shriram Transport Finance Company Limited has bought 40-per cent stake in Ashley Transport Services Limited for an undisclosed sum.
Owned by Ashok Leyland Limited and its sister companies the Rs10-crore (equity base) Ashley Transport Services operates a transport exchange that brings together truckers and shippers for load placement.
Announcing the stake sale R Seshasayee, managing director, Ashok Leyland, said that roping in a strategic investor would enable Ashley Transport Services to offer services like challan discounting for its members.
The transport exchange promoted couple of years ago was not active as the company was developing software for its operations. Seshasayee said with the development of the software Ashley Transport was ready to embark set on a growth path.
The 1,500-member transport exchange operates out of 29 locations and plans to increase the service delivery points to 100 in two year's time. The company earns its income from commission on the value of freight booked through the exchange and a fee on other services.
Speaking about the exchange J K Rajagopal, chief executive, Tranport Exchange said, freight intermediation services in India is dominated by small, localised and unorganised players. As a result truck owners have been saddled with poor return load availability, absence of transparency and revenue leakages affecting, which have all affected their operating viability.
Rajagopal said the transport exchange would plug the leakages and bring in transparency and increase the revenues for the truck operators through return load and other services.
According to R Sridhar, managing director, Shriram Transport Finance, the domestic trucking market is estimated at around Rs70,000 crore and the company expects its challan discounting to fund around 5 per cent of this amount, through various tie ups.