Know Your IPO : Snowman Logistics

A Karnataka-based company, Snowman Logistics (SLL) has plans to go public, as it has recently filed its DRHP to the SEBI. The company has proposed to list its equity shares on BSE and NSE. SLL has proposed to offer 4.2 crore equity shares of face value Rs 10 each for an undisclosed price-band to raise approximately Rs 142.87 crore for setting up new warehouses and to meet long term working capital requirement. The book-running lead manager to this issue is HDFC Bank.The logistics company (SLL) is a joint venture between Gateway Distriparks (a container logistics company), Mitsubishi Corporation (Japan's largest general trading company), Nichirei Corporation (Japan's leading company in food processing) and International Finance Corporation.

SLL initially commenced its operations in the year 1998 as a trader of frozen marine products. Later, it entered into warehousing, transportation and distribution services. It primarily operates in two segments – temperature controlled services and ambient services. Along with this it also provides value added services like sorting of vegetables & fruits, grading, packing, washing, precooling etc. to its clients. SLL’s product list includes ice-cream, poultry, sea-food, dairy products, meat, fruits, vegetables, pharmaceutical products, frozen products and retail food chain.

The company has a pan-India presence with its network spread across Delhi, Mumbai, Calcutta, Chennai, Hyderabad, Pune, Ahmedabad, Goa, Kochi, Faridabad and Ludhiana.

During the fiscal year 2013, the company reported growth of 78% in its revenue, which reached Rs 114 crore. The main revenue driver for the business turned out to be the temperature controlled services segment, which grew by 56% to Rs 92 crore. In the meanwhile, its other segment reported a growth of Rs 6 crore to Rs 20 crore in FY13, as compared to the previous year.

In this period, due to increase in pallet storage capacity in its warehousing division, the operating expenses of SLL increased to Rs 88 crore from Rs 48 crore in FY12. Operating income for the company stood at Rs 26 crore over Rs 16 crore in FY12. Higher income from both the segments led to the bottomline growing by 196% to Rs 19 crore on a yearly basis.

In the listed space, there were no peer companies to SLL for a direct comparison. However, listed players like Gateway Distriparks, Container Corporation of India and Transport Corporation of India are partially engaged in temperature controlled services.