Balmer Lawrie & Co Ltd has given in-principle board approval to demerge its travel and vacations business into a wholly owned subsidiary, while committing fresh investment to rail logistics, third-party logistics and travel operations. The restructuring is intended to improve operational efficiency and support expansion, the public sector undertaking’s chairman and managing director Adhip Nath Palchaudhuri said at the company’s 109th annual general meeting.
The travel and vacations division currently has a turnover of Rs 390 crore, accounting for 13% to 14% of Balmer Lawrie’s total revenue. The proposed subsidiary is expected to reach annual revenue of Rs 500 crore within two to three years, subject to the approvals required for the demerger.
Palchaudhuri said the separate structure would allow the business to adopt artificial intelligence and modern booking technologies more quickly. It would also enable the company to pursue long-term equity, technology and strategic alliances with private companies, banks and institutions.
The CMD rejected speculation that the travel division would be acquired by the Indian Railway Catering and Tourism Corporation. The company’s current plan is to place the business in a wholly owned subsidiary rather than transfer it to another public sector enterprise, according to the statement reported from the AGM.
Balmer Lawrie, which operates under the Ministry of Petroleum and Natural Gas, plans to invest around Rs 500 crore over the next three years across its rail logistics, third-party logistics and travel businesses. Railway logistics is expected to receive Rs 200 crore to Rs 250 crore of that investment. Around Rs 100 crore has been earmarked for routine operational capital expenditure across existing businesses, including packaging, greases and lubricants, and chemicals.
A further Rs 50 crore to Rs 60 crore will be used to expand third-party logistics operations. The company is developing a hub-and-spoke network centred on a central hub at Dankuni, near Kolkata, with spokes planned in Siliguri, Guwahati and Bhubaneswar.
The proposed network places Dankuni at the centre of Balmer Lawrie’s logistics expansion in eastern India. The planned spokes would connect the hub with markets in north Bengal, the Northeast and Odisha, although the company has not disclosed an operating timeline or detailed capacity for the network in the information available.
The demerger and the investment programme come as the company seeks to develop its logistics and travel businesses alongside its established industrial operations. The travel subsidiary’s final structure, implementation schedule and partnerships will depend on the approvals still required for the proposal.
