Update – A Snowman in the Summer Sun?

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Snowman Logistics IPO Update

See Current Market Price

Date 12th Sept 2014

  • The IPO closed on 28th Aug with tremendous enthusiasm from investors. The issue was 60 times oversubscribed, a sign of a very positive mood for Indian markets in general and IPOs in particular.
  • Institutions oversubscribed 17 times, Retail 41 times and non-Institution (HNI + corporates) a stunning 222 times.
  • JainMatrix Investments has once again got it right – this IPO was a Buy recommendation and the listing looks successful for investors, so far.
  • Obviously the IPO pricing was at the upper end of Rs 47.
  • I expected this small 197 crore IPO to fly through in the very positive market, but this is a heavy downpour than a drizzle
  • It has collected 12,000 crores – 60 times its offering and 77 times its FY14 revenue.
  • My guess is that the success of the recent IPO, Wonderla Holidays has brought investors back to this platform.

Today’s Opinion 

  • Today Snowman Logistics has listed on the bourses, and at last check was already 68% up from the IPO price, at Rs 79
  • My opinion of SLL is captured in report below – that its an aggressively priced offering, but still worth investing at IPO price from a one year perspective.
  • I stay with this opinion, but we are now witnessing a financial flood whose fury cannot be gauged in the short term.
  • Investors who were lucky enough to be allotted shares are advised to maximize their short term profits and exit.
  • As I said recently, the IPO season of 2014 has now officially started.

To read my IPO report dated 27 August, Click Links below.

Happy investing

Punit Jain

Disclosures and Disclaimer

  • This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation.
  • JM has been publishing equity research reports since Nov 2012.
  • JM and its promoters/ employees have no financial interest in SLL, no stock ownership interest in SLL and no known material conflict of interest as on date of publication of this report.
  • This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security.
  • The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same.
  • Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein.
  • Recipients of this report should be aware that past performance is not necessarily an indicator of future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of any doubt, advice should be sought from a certified Financial expert/advisor.
  • Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com

JM - JainMatrix Investments

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Snowman Logistics IPO – Original report

  • Date August 27, 2014
  • Industry – Logistics, and Small Cap share – 783 cr. mkt cap
  • Price range: Rs. 44 – 47 and IPO Period: 26-28 August 2014

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Here is a note on Snowman Logistics Ltd. IPO (SLL).

Summary:

  • SLL is a leader in cold chain infra and logistics, has synergies with promoter Gateway Distriparks
  • It’s a high demand sector, with good growth prospects, visible food wastage and govt. support.
  • Seen rapid growth from small base – Income, EBITDA, Profits have grown 43, 51 and 55% CAGR 
  • The market is looking positive and open to such offerings.
  • Risks include aggressive opportunistic IPO pricing and negative cash flows. 
  • Advice: Buy with a medium term, 1 year perspective 

Introduction

  • Snowman Logistics is a Bangalore based firm with a cold chain and distribution network.
  • It operates 23 temperature controlled warehouses (at 14 locations) and 370 reefer transport vehicles.

View original post 2,268 more words

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