Gateway Distriparks 'rails' into the green

Gateway Distriparks is showing a lot of movement today. The stock opened in the positive and it is currently up 4% at Rs.381.40, which is close to its intra day high point of Rs.384.90. Volumes are also pretty robust at 39,000 shares traded today alone compared to 32,000 shares over two-week average.

The sudden rally in the stock is on account of news that the company plans to list its rail unit – Gateway Rail Freight. It is planning on an IPO and it also in talks with PE fund, Blackstone to buy its 5% stake in the unit – a move to retain its majority stake after the IPO. This rai company is valued by analysts at approximately $500 million as at end of FY16.

If and when this IPO goes through, this would be the second unit after Gateway to get itself listed on the parent lineage. Snowman Logistics, its cold chain unit had issued shares at Rs.47 and today it is quoted well above Rs.95.

Snowman is an integrated temperature controlled logistics service provider. Its initial public offer had opened on August 26 and closed on August 28. The IPO had seen a great demand and was over-subscribed nearly 60 times. Thus expectation now that the rail unit too will see some very good response.