Snowman Logistics Shares Soar 70% on Market Debut

Shares in Snowman Logistics - an integrated temperature controlled logistics service provider - jumped 70 per cent in its debut on Friday. The stock, which got allotted at Rs 47 apiece, ended at Rs 79.80 on the National Stock Exchange.

The company had got a very good response for its IPO last month. The issue was oversubscribed nearly 60 times. Even the quota of retail investors got subscribed 41 times.

Snowman Logistics raised nearly Rs 200 crore through the IPO. Snowman plans to use the proceeds from the public issue towards setting up new temperature controlled and ambient warehouses, long term working capital, and for general corporate purposes.

In an interview to NDTV, Ravi Kannan, CEO & director, Snowman Logistics said the company will use Rs 80 crore to retire its bridge loan, post which Snowman's total debt would come down to Rs 100 crore.

The company plans to invest Rs 120 crore to add eight more facilities across India, which will take Snowman to 25 warehouses, Mr Kannan added.

Dairy products including ice cream, sea food and Quick Service Restaurants are the biggest product categories for Snowman.

Valuations:

At current market price, Snowman Logistics is trading at over 50 times its earnings per share. Mr Kannan told NDTV that valuations are fair because the company has grown its revenues at 35 per cent CAGR, while ebitda has grown at 82 per cent. Volumes have risen by 60-70 per cent over the last year, he added.

However, independent analyst Sanjeev Bhasin told NDTV that investors should book profits and invest in Nifty companies.

Snowman's parent Gateway Distriparks ended 1.63 per cent lower. Other logistics firms also gained on relative valuations. Gati ended 0.08 per cent higher, Container Corp of India closed 0.63 per cent higher, while Balmer Lawrie and Co advanced 0.11 per cent.

(With inputs from PTI and Reuters)