Gateway Distriparks arm Snowman Logistics plans Rs 200 cr IPO

Snowman Logistics, the cold chain unit of Gateway Distriparks, today announced its plans to raise up to Rs 200 crore through an initial public offering (IPO), indicating the revival of the moribund primary markets.
The company said the proceeds will go into repayment of bridge-loans and fuel expansion plans. The issue will hit the markets on August 26 and close on 28.
The city-based Snowman will be issuing 42 million equity shares or 25.3 per cent of the promoters' holdings, through the process. The company has put price-band of Rs 44-47. At the higher of the price-band, it will be able to mop up around Rs 197 crore.

The proceeds will go in repayment of bridge-loan and long- term loans worth around Rs 90 crore, and the rest will go into funding the proposed six temperature controlled warehouses and two ambient warehouses, CEO Ravi Kannan said.
At present, Gateway Distriparks holds 54.04 per cent in the company while International Finance Corporation and Mitsubishi of Japan hold 12 per cent stake each. Mitsubishi Logistics also holds 3 per cent shares in the company.
Snowman Logistics is an integrated temperature controlled logistics services provider with 23 temperature controlled warehouses across 14 locations in the country including Serampore (near Kolkata), Taloja (near Mumbai), Palwal (near Delhi), Mevalurkuppam (near Chennai) and Bangalore capable of warehousing 58,543 pallets and 3,000 ambient pallets as of March 2014, Kannan said, adding it operates 370 reefer vehicles for primary and secondary transportation.

Snowman Logistics chairman Gopinath Pillai said, "Our objective is to be the premier temperature-control industry player. There will be competition, but we hope we have the stamina to take on competition."

He said the cold-chain industry is around Rs 15,000 crore with 75 per cent of the total business coming from potatoes.
"The industry is growing at 15-20 per cent annually while the higher value products growing faster than its growth at 25 per cent," he said, adding, the proposed temperature controlled warehouses will come up at Taloja, Cuttack, Pune, Mevalurkuppam and Visakhapatnam while ambient warehouses will be set up in Pune and Surat.

HDFC Securities is the book running lead manager to the issue.