ETA Star to invest $1billion in India

ETA Star to invest $1billion in India

The Dubai-based company will enter port, aviation sectors to cash in on the boom.

ETA Star, one of Dubai’s household names, will invest more than $1 billion in India to cash in on booming sectors such as ports and aviation. This will be in addition to other combined investments committed by the company in the power and real estate sectors, which total more than Rs 9,000 crore.

The diversified group is likely to invest Rs 4,000-4,500 crore in the development of a port in Tamil Nadu. The company is already believed to be in final stages of selecting the required site. A study is underway for the same.

The project will be executed through a special purpose vehicle (SPV) that may be formed in the next 7-8 months. The proposal of naming the SPV as ETA Star Ports is currently thought about.

However, it will form a part of the ETA Star umbrella in India, which also has business interest in areas such as real estate, power, engineering and shipping lines.

Hameed Salahuddin, director, ETA Star, said, “We will finalise our plans for the ports venture after the bathymetry study is drafted, which is underway. We will convey our intentions to the Tamil Nadu government shortly.”

The port will look to handle shipments of coal so as to serve a number of power projects which are coming up within the state. It will also handle a sizeable number of automobile export and import as auto facilities of Hyundai, Ford and Ashok Leyland, among others, are based in the vicinity.

Star Aviation, the Chennai-based private airline firm of the ETA group, is looking to start commercial flight operations in June-July this year, after it received the civil aviation ministry’s permission in December.

The airline aims to first launch itself as a regional carrier in the southern market, connecting cities such as Visakapatanam, Coimbatore and Madurai as also metros such as Chennai, Bangalore, Kochi and Hyderabad.

The company will start operations with 3-4 leased and 2 owned Airbus with single class configuration. Company officials claim that the airline will operate in an all-economy class, on the lines of another southern carrier Paramount Airways.

The group’s plan is to make air travel affordable for the local people, without becoming an all out budget carrier.

Salahuddin added, “There is a huge demand from people of tier-II and tier-III cities in India for air travel. These people have the money to go the distance, but as there is no availability of services from existing airlines, we will bridge that gap and explore the market.”

The company aims to aggressively explore the possibility of having a pan-India presence in due course. This will happen through induction of more aircraft and increase in the number of connecting routes.

The company is also awaiting a clear mandate from the government on rules for starting international operations