South Korean firm CJ Logistics Corporation aims to raise funds from external investors to fund its planned expansion through investments in India, where demand for logistics services is increasing rapidly on the back of a fast-growing economy.

The company is sounding out investors for a private placement of new shares in its Indian subsidiary, CJ Darcl Logistics, industry sources said, in a deal that is expected to be worth around 50 billion won ($45.2 million). Other details and the timeline of the sale have not yet been determined.

CJ Logistics hopes to realize its ambition of becoming a top global logistics player by focusing on the Indian market, which the company considers a key driver of its growth. India was ranked second behind China in the 2020 Agility Emerging Markets Logistics Index, which rates 50 countries on their logistics capability, using factors like domestic and international logistics opportunities and business fundamentals.

As the Indian government eases restrictions on foreign direct investment, CJ Logistics plans to increase its investments in Delhi, Mumbai, Chennai and Kolkata in the next five years with the aim of building CJ Darcl Logistics into the largest logistics company in India by 2025. It is also expected to focus on strengthening its logistics networks across neighboring countries such as Nepal and Bangladesh.

CJ Logistics acquired a 50% ownership interest and control of CJ Darcl Logistics, then known as Darcl Logistics, in August 2017. The company then was the largest player in India’s transport market, with two subsidiaries locally and one in Nepal.

CJ Darcl Logistics has since expanded its business to include fulfillment operations, which enabled the company to provide comprehensive logistics services, including transport, warehousing, packaging and delivery.

According to the consolidated financial statements of CJ Logistics, the Indian subsidiary’s revenue increased 12.3% to 396 billion won in 2019. While the company will have been affected by the Covid-19 pandemic this year, industry watchers are optimistic about its long-term growth prospects. (Reporting by Ar-rum Rho)