India's Gateway offers to buy Blackstone stake in freight subsidiary
Indian logistics company Gateway Distriparks (GDL) has offered to buy The Blackstone Group's stake in its freight subsidiary GatewayRail Freight (GRFL) for INR6 billion ($90.3 million).
The offer, which was announced in a regulatory filing, would allow the GP to exit GRFL for twice the INR3 billion it paid for its stake in 2010. GDL said the offer was made according to the terms of the agreement between the two parties. Blackstone will have 30 days to accept or reject the offer.
GDL's offer comes after a request by Blackstone earlier this year to initiate an IPO for GRFL according to the terms of the 2010 investment. GDL said at the time that it would initiate steps for the IPO.
GRFL handles the rail operations of GDL through a network of rail-linked container depots, which connect its fleet of 21 trains and more than 235 shipping trailers. It handles bot imported and exported goods, as well as domestic shipping.
While GRFL is a first-party logistics provider, India's third party logistics sector is also attracting investor interest, with expectations of greater opportunities after proposed tax changes.
In June, TVS Logistics bought the Tata Group's Drive India Enterprise Solutions asset with support from the Tata Opportunities Fund, and Sequoia Capital and Kae Capital led a INR350 million Series A round for online logistics marketplace Porter.
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