PE-backed Snowman jumps 67.5% on India debut

The stock closed at INR78.46 in a flat Mumbai market, a substantial increase on the IPO price of INR47. As of Monday morning, Snowman was trading at about INR83.75.

The company raised INR1.97 billion ($33 million) from the sale of 42 million shares after pricing the offering at the top end of the indicative range. The IPO - which represented an equity dilution of 25.23%, valuing the firm at around INR7.82 billion - was 59x times oversubscribed, with institutional buyers and retail investors bidding about 17x and 41x their respective reserved portions.

The listing is understood to be the first since India's genral election in May.

Among the anchor investors was Faering Capital, which picked 3.49 million shares for INR16.4 million via its India Evolving Fund. Following the offering, promoter Gateway Distriparks owns a 54.1% stake and Japan-based Mitsubishi Corporation holds 9.4%. Meanwhile, VC backers Norwest Venture Partners and International Finance Corporation (IFC) hold 10.3% and 9.27%, respectively. 

Norwest originally took a 14% stake in Snowman in June last year for INR600 million. IFC put in $5.35 million in 2009 and then part-exited earlier this year by selling a quarter of its holding to the promoter for INR180 million.

Set up in 1997, Bangalore-headquartered Snowman offers temperature-controlled storage and transportation solutions for a number of a multinational corporations operating in India, particularly in the food and beverage sector. Its clients include the likes of Unilever, Baskin Robbins, Pizza Hut and Mother Dairy.

The business claims to be India's first cold-chain company with a nationwide footprint, connecting more than 100 cities and distributing to more than 4,400 outlets. The company has around 23 temperature-controlled warehouses across 14 locations nationwide, and a fleet 238 reefer vehicles - of which 63 are owned and the rest leased.

According to the prospectus, proceeds from the IPO are being used to set up new temperature-controlled warehouse, as long-term working capital, and for the general corporate purposes. Snowman reported a net profit of INR232 million for the 12 months ended March 2014, against a net profit of INR198 million for the previous year. Net revenue rose from INR1.14 billion to INR1.53 billion over the same period.

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• Topics
• South Asia
• Industrials
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• India
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• Norwest Venture Partners
• IPO
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