Anshuman Singh founded Stellar Value Chain 1.5 years ago after a successful career helping build Future Supply Chain for Kishore Biyani. Stellar has grown rapidly with $125 million in seed funding from Warburg Pincus. Singh aims to build an integrated supply chain company offering services across 3PL, transportation, and warehousing. Stellar has already signed contracts for 20 million square feet of warehousing space across India and acquired two mid-sized companies. Singh's vision is for Stellar to have 50 million square feet of warehouse space across 21 Indian cities generating $1 billion in revenue by 2022.

1. `50RNI No.35850/80; Reg. No. MCS-123/2018-20; Published on: Every alternate Monday; Posted at Patrika Channel Sorting office, Mumbai-400001 on every alternate Wednesday-Thursday
March 26-April 8, 2018
n Trade wars & India
n Rushil Décor
n Kef Infra
n Fishing for success
Into the
Limelight
To not let a crisis
go to waste,
RBI governor
Urjit Patel finds
himself a front seat

2. Business India u the maga zine of the cor por ate wor ldCorporate Reports
u 56 u
march 26 -april 8, 2018
A
nshuman Singh (48), founder
& md of the 1.5-year-old Stellar
Value Chain, is a firm believer
in God and fate. Kishore Biyani, who
is the inspirational figure for Singh’s-
enterpreneurial innings, comes close
behind. “My association with Kishore
Biyani for 16 years (in two stints) has
taught me to dream big,” says Singh.
“I was comfortably placed with Future
Supply Chain, which I had created
from the scratch, but then Stellar hap-
pened because I wanted to change
the supply chain landscape the way
Biyani did with retail.” After his ear-
lier innings with Biyani, Singh had
gone to Welspun as ceo in 2004, but,
then, came back in 2006 to spear-
head a supply chain subsidiary, at
Biyani’s behest.
Considered a veteran in the sup-
ply chain industry, Anshuman Singh,
over the last two decades, has wit-
nessed the transformation necessi-
tated by the rapid growth in several
sectors – telecom, automobile, fmcg,
consumer durables, electronics, retail,
pharma and now also e-commerce.
The implementation of gst is expected
to further redefine the practices, as
supply chain criticality has emerged as
a mean to reduce cost with a host of
associated benefits.
Future Supply Chain, which recently
had a successful ipo, is a major entity
in the domain now and industry insid-
ers reckon that Singh almost had a free
hand there (he also held a small equity
portion in it). But the calling to create
something transformative on a grand
scale in the supply chain domain led to
the formation of Stellar in 2016 and it
would be no exaggeration to say that it
happened with a bang – with the larg-
est ever pe seed capital (Warburg Pincus
deciding to support the venture with
$125 million or over R800 crore) routed
to a logistics start-up in the country.
“The kind of capital which he man-
aged to generate to kick-start his new
venture had simply surprised or even
stumped the industry,” says Harry
Lagad, a supply chain expert, who has
served in senior management posi-
tions both with the 3pl companies, as
well as end-user firms. “He didn’t bring
any tangible asset on the table, he just
sold an idea or a plan”. And there were
many from the industry who felt that
the lucky man has got more on his
plate than what he could really digest.
“It’s easier to grow in the shadows of
somebody of the stature of Kishore
Biyani,” a senior official of a well-es-
tablished 3pl firm had said then. “Let’s
see what he does with this $125 mil-
lion bounty”.
Though 18 months is too short
a period to judge the strength of
a start-up and pass on a conclu-
sive verdict on the possible fate
of a company, Stellar Value Chain
in its own way has got off to a good
start. The company has already taken
over 2 million sq ft of modern ware-
house space across seven cities in the
country, with an aim of offering con-
tract logistics, referred as 3pl services,
which involves comprehensive ser-
vices, starting from sourcing of raw
materials to delivering the goods to the
points of sales or the last mile. Stellar
has also acquired two mid-scale buy-
outs – one in cold chain and another
in express distribution sphere – mak-
ing it amply clear that the company is
also aligned with inorganic options to
grow in size.
Future perfect?
Stellar helps clients grow their business by
improving their supply chain
Singh: in the
big game

3. Business India u the maga zine of the cor por ate wor ld Corporate Reports
u 57 u
march 26 -april 8, 2018
Leap to value chain
Conventional wisdom would suggest
that chief of a business conglomerate,
who had supported one of his proté-
gées to successfully create a venture
under his own brand umbrella may
not like him to go out and get into a
competing space. The issue of run-
ning away with clients and key people
undeniably has validity. And this has
been a matter of intense speculation
in the marketplace, when it comes to
the Kishore Biyani-Anshuman Singh
equation. Stellar chief, however, claims
that such theories have been totally
unfounded. “I know some people
had raised such apprehensions with
Biyani,” says Singh. “But his response
was: ‘it is too big a market and cer-
tainly big enough to accommodate
everybody’. There was no acrimony of
any kind at all; nor was I asked to sign
any anti-encroachment deal. He is a
man of grand vision; such small issues
would never bother him”.
It is this size of the market, which
Stellar is seeking to address. And
respond to the rapidly transforming
and growing market, where attain-
ing supply chain efficiency is a man-
tra across the board today. “I was sure
from the beginning that I would not
take the typical start-up route of col-
lecting several series of small funds,”
underlines Singh. “I am no longer in
my 30s and this could not have worked
for me. I wanted to be in the big
game right away and that needed big
capital support”.
So, what does this big game theory
mean for Stellar, which surprisingly is
not calling itself a supply chain but a
value chain company? “The idea is to
help our clients grow their business by
improving their supply chain, build-
ing up large infrastructure support
system for them, reducing their inven-
tory for higher rate of returns and
ensuring speed across the entire value
chain. We don’t want to be mere ser-
vice provider of different legs of their
logistics requirements but the entire
process and, by doing so, we will be
partnering them in creating value,”
he explains. “If you ask me what is
going to be the dna of Stellar, my sim-
ple answer would be – excellence in
everything we do. Speed, transpar-
ency, accuracy and high-end techno-
logical engineering support will be the
other critical factors,” informs Deven
Pabaru, an old-time associate of Stel-
lar’s founder, who joined the company
as chief strategy & implementation
officer in June 2017, after spending 10
years with Future Supply Chain.
In specific terms, the company is
betting big on the contract logistics
space which, as Samsher Dewan, vp,
corporate ratings, icra, the credit rat-
ing agency, says, is still in a nascent
stage. But it has immense possibility,
now that big corporates are redrawing
their supply chain strategy post-gst to
gain efficiency and cost benefits. “The
overall Indian logistics business is esti-
mated to be in the range of $300 bil-
lion annually,” observes Dewan. “Out
of this, contract logistics’ share is
about 10 per cent. But this segment is
now picking up in a big way particu-
larly in spheres like automobile, fmcg,
consumer durables, modern retail,
etc. Mahindra, tci, Safexpress, etc,
have emerged as the leading players in
this segment”.
Adds Amit Kumar, lead consultant,
logistics, Ernst & Young India: “If you
could manage to win a client with
your integrated offerings, chances are
the client will stick with you for a long
time as we have seen in developed
markets. Instead of dealing with sev-
eral vendors, they would rather pre-
fer to go along with someone who can
take care of all their needs. But preci-
sion is the key here and serious players
are striving to do just that consider-
ing the fact that this is becoming a big
game now”.
The company has started unveil-
ing warehousing units, which qual-
ify to be called big boxes, equipped
with high-end automation and tech-
nological support. The total space of
warehouses in Mumbai, Pune, Panvel,
Bhiwandi, Bengaluru, Chennai and
Delhi is about 2.5 million sq ft. On
the transportation side, the company
has put together a fleet size of nearly
1,000 vehicles.
Stellar is specifically pursuing the
third party asset management route
(with firm committment) to expand
its distribution hub capacity as it will
keep the capex down. “We are partner-
ing with regional warehouse develop-
ers, who are creating built-to-suit units
as per our specification on 10-12 years’
lease guarantee from us. Similarly, on
the transportation side, we own only
300 vehicles, while the rest belongs to
transport partners, who are exclusively
working for us. So, we are actually cre-
ating a vibrant ecosystem of partners in
creating our infrastructure and opera-
tional assets,” underlines Singh.
The report card
The company has till date signed up
20 million sq ft of warehousing space
all across the country and is looking to
have a profile of 6.5-7 million sq ft of
actual operations by the end of March,
2019 across 14 cities. The company
claims its offerings are largely aligned to
the fashion, e-commerce, retail, fmcg,
consumer durables, automobile sectors.
“We are absolutely clear in our mind.
In the near run, we will be only focus-
ing on consumption verticals and noth-
ing else. Pharma and telecom are other
sectors, which we are trying to add to
our portfolio,” says Singh, though he
refused to divulge the names of some
of his top clients. A moot question here
A Stellar Journey

4. Business India u the maga zine of the cor por ate wor ldCorporate Reports
u 58 u
march 26 -april 8, 2018
would be: is this hurried signing of
warehousing space aligned to the larger
demand-supply dynamics playing out
in the market place?
According to a recent report by cbre
South Asia, warehousing leasing in the
country grew by a hefty 50 per cent in
the second half of 2017 (vis-à-vis trends
in the first half of the year), amounting
to nearly 10 million sq ft of fresh con-
tracts with Bengaluru, Delhi/ncr and
Chennai leading the pack. And among
other things, the momentum has also
been attributed to the final roll out of
gst after which companies are setting
afoot initiatives to spruce up their sup-
ply chain functionalities.
Acquisition of Kelvin Cold Chain
(Stellar had bought a majority stake
in it early last year and is likely to ini-
tiate its complete acquisition soon),
a mid-scale cold chain firm, and also
the Kolkata-headquartered Innovative
Logistics (a formal announcement is
expected shortly) has helped Stellar.
“Acquisition of Innovative is a smart
move,” acknowledges Amit Kumar
of Ernst & Young. “When it comes to
catering to the secondary markets, even
established 3pls tend to outsource their
work to regional players. But if you are
looking at a larger integrated play, it
is advisable to have it as your captive
strength”. Going by the market buzz,
the Kelvin deal was clinched at about
R40 crore, while the Innovative buyout
would be in the range of R90-100 crore.
Stellar founder, though, refused to clar-
ify the exact numbers.
And the company is also claiming to
have grown to the extent where it needs
a pool of nearly 4,000. “The best thing
about Stellar’s operational style is that
decision-making is just one call away.
Singh’s deep understanding of the sup-
ply chain business makes things easy.
This is indeed an exciting spell for all
of us here,” claims Mohandas Menon,
coo, Contract Logistics division.
An interesting point here would
be: how would Singh and his team
approach Stellar’s basic building
block exercise vis-à-vis what was done
10 years back during Future Supply
Chains’ formative years? “One criti-
cal difference was that Future Supply
Chain in its initial years was retail-fo-
cussed,” explains Pabaru. “That is not
the case here. A decade back, because
of lack of policy support and other
reasons, we did not have an ecosys-
tem to dream of multi-million square
feet kind of warehousing infrastruc-
tural base. But we can afford to nur-
ture such a dream now.”
The big picture
Singh, who is also characterised by his
ability to think big, visualises that, by
2022, “We are targeting to have an
operational warehouse base of 50 mil-
lion sq ft spread across 21 cities, mostly
consumption and production centres.
Each city will have 1.5-2 million sq ft
space under our command. These will
basically be large logistics parks with
five-six buildings or sections within
the complex cold chain, express dis-
tribution, dry distribution centres,
e-commerce fulfillment section, etc.
Through our express distribution cap-
tive strength, we would be in a posi-
tion to reach out to 3,000 towns and
cities,” The expansion plan envisages
an investment of about R25,000 crore
in warehousing, transportation and
other support services coming from
associate partners. The topline could
grow to $1 billion, he says. Despite the
hype over the bright prospects in the
logistics business, the country is yet to
witness the emergence of a billion dol-
lar club in the pure supply chain sec-
tor, with Concor, Allcargo and dhl
(with the combined might of Blue
Dart) believed to be the frontrunners
to make it there.
One view is that Singh is too ambi-
tious. “I wouldn’t comment on the
aspirations of any specific company,”
says Manish Saigal, managing direc-
tor, India, Alvarez & Marsal, a global
consultancy & research firm. “But
yes, given the improvement in the
ecosystem for this business and with
right policies in place, you will see
the emergence of many companies in
the space in the annual topline range
of $300-500 million. Many of them
would be profitable too.” The agency
had recently released a report say-
ing that organised logistics in India
would touch $50 billion by 2022. And
there are cyclical issues too. “After the
implementation of gst, contract logis-
tics has become the new buzz word.
Everybody would like to do it. But,
apart from precision of highest order
in your integrated offerings, success
in contract logistics is also a function
of economic environment. And, the
caveat is: all the plans can go awry, if
something goes wrong with the econ-
omy,” says a senior executive of a well
established 3PL firm.
There is an interesting story about
Anshuman Singh. In the formative
years of Future Supply Chain, he had
gone on a trip to the US to understand
the automation technology for the big
warehouses, which Future group was
planning. But, coming back to India,
he contracted a series of local technol-
ogy vendors to deliver different com-
ponents of the larger automation piece.
And that had worked for him earning
him the nickname ‘jugad king’ within
the industry circles.
u RITWI K SINHA
ritwik.sinha@businessindiagroup.com
A warehousing unit: unveiling the big box