Snowman Logistics IPO – Crisil rates 4/5 – Should you invest?
After Wonderla IPO and after long time, there is one more non SME IPO, Snowman Logistics IPO would hit market on 26th August, 2014. Crisil rates this Snowman Logistics Limited IPO at 4/5 which indicates above average fundamentals. Revenues have been growing consistently in the last 5 years. What should be your take on this Snowman Logistics Initial Public Offering? What are the risks involved in this IPO? Should we invest in a Snowman Logistics IPO or not?
About Snowman Logistics Limited
Bengaluru based, Snowman Logistics is integrated temperature controller logistics service provider. Its business is classified into. a) Temperature controlled services and b) Ambient distribution.
Their warehousing solutions cover the complete spectrum of temperature ranges from ambient to chilled and frozen (i.e. +20ºC to -25ºC). They offer blast freezing facilities at their temperature controlled warehouses in Bengaluru, Mevalurkuppam, (near Chennai), Visakhapatnam, Serampore (near Kolkata), Taloja (near Mumbai), Ahmedabad, Palwal (near Delhi), Mubarakpur (near Chandigarh) and Surat. As of March 31, 2014, their operations comprised 23 temperature controlled warehouses across 14 locations in India including Serampore (near Kolkata), Taloja (near Mumbai), Palwal (near Delhi), Mevalurkuppam, (near Chennai) and Bengaluru capable of warehousing 58,543 pallets and 3,000 ambient pallets.
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Issue details of Snowman Logistics IPO
- IPO opens: 26-August-2014
- IPO closes: 28-August-2014
- Price band: Rs 44 to Rs 47 on book building process. Means when you apply, you can quote any share price between Rs 44 and Rs 47. If it is oversubscribed by investors at highest band, investors who invested at such high band only would be alloted. For others, company would refund the money.
- Minimum Shares: 300
- Minimum investment: Rs 13,200
- No. of shares open for subscription: 4.2 Crores
- Issue size: Rs 187 Crores to Rs 197.2 Crores
- Lead Managers: HDFC Bank
- Listing: BSE and NSE
- Download Snowman Logistics IPO Prospectus from BSE website here
Purpose of the IPO: The funds would be used for the following purposes.
- Setting up a new temperature controller and ambient warehouses
- Long Term Working Capital Requirements and
- General Corporate Purposes
Company Financials
- Company generated revenue of Rs 36.9 Crores for the year ended Mar-10 and Rs 155.20 Crores for the year ended Mar-14.
- Company posted a profit of Rs 4.1 Crores for the year ended Mar-10 and a profit of Rs 22.4 Crores for the year ended Mar-2014.
Reasons to invest Snowman Logistics IPO
- Good revenue growth of Rs 36.9 Crores in FY 2010 to Rs 155 Crores in FY 2014. Its operating income CAGR growth of 48.5% between FY 10 Vs FY13.
- Good profit growth at CAGR of 79% between FY 10 to FY 13.
- Unique business model.
- This issue has been graded by Crisil as 4/5 which indicates above average fundamentals.
Reasons not to invest in a Snowman Logistics IPO
- Criminal proceedings pending against one of the Director and if determined against could have an adverse impact on business and financial results of the company.
- Outstanding legal proceedings involving company, promoters and group entities. Any negative outcome, can impact the company performance.
- It has negative cash flows in 5 years. This indicates that it need to borrow loans for high rate of interest and has difficulty in managing working capital requirements. This would affect the profits of the company.
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Recommendation / Investment strategy:
- Its average EPS in the last 3 years ending Mar-2014 is Rs 1.70. Its EPS for year ended Mar-14 is 1.96. Considering the issue price of Rs 44 to Rs 47, the P/E Ratio based on average EPS of 3 years works out to be between 26 and 27. There is no listed in India in such similar business, hence comparison of the P/E Ratio OR the issue price is not possible.
- Snowman Logistics Limited IPO has several positive factors. Its revenues are consistently growing. Profits in the last few years has seen good improvement. The issue price only looks on higher side. Though there are a few negative factors, you can invest in this IPO and can expect a good, decent return in 1-2 years. You can subscribe at Rs 47 (higher price band) per share.
- I am sure this would be one more Wonderla Holidays IPO where investors has gained handsome returns of 150% till now.
Happy Investing!!!
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Suresh
Snowman Logistics IPO – You should subscribe
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Hello Sir. You have an amazing blog. I have learnt a lot from your posts. It would be really helpful for a beginner investor like me if you could write about IPO basics (considering the Snowman and Wonderla IPOs), how to invest in such things and provide links for further self learning. Kudos again.
Sure
Hi Suresh,
I applied for the minimum lot, but not allocated. Anyhow, i will apply for additional lot by next IPO which you subscribe. Have you got allotted?
Regards,
Vignesh. S
No Vignesh:-(
Hi Suresh,
Most of us seem not have been allocated the IPO. Hope they preferred the Non ASBA over the ASBA Requests. Anyhow, i will hope i will get a better luck on your next advised IPO.
While i was on the Moneycontrol Page, i can see that Shemaroo Entertainment is coming with their IPO on 16th of September. Can you please have a look and advise us?
Regards,
Vignesh. S
Hello,
I have applied for 5 Lots (1500 Shares). But every where I read that applying one lot will yield more chances of allottment than applying for 5 lots at once. Could you please let me know what will be chances of me getting any shares.
Hi Suresh,
I have applied in the NII Category for 4500 shares. but its subscribed 100 times. can you let me know the allocation basis(proportinate).
Hi Suresh,
Excellent work ! i have subscriped 600 shares of IPO on the 2nd day. how does the allotment of shares takes place as it is over bought ? When will i get to know if any shares are allotted to me?
Thanks,
Sumanth
Non-institutional bidders – Individual investors, NRI’s, companies, trusts etc who bid for more then Rs 1 lakhs are known as Non-institutional bidders. They need not to register with SEBI like RII’s. Non-institutional bidders have an allocation of 15% of shares of the total issue size in Book Build IPO’s.
Question:
There is a huge competition between Retail bidders for good IPOs. If we invest more than 1 Lack, are we considered automatically under Non-institutional bidders? or do we need to specify while applying for IPO issue?
Thanks
Thanks, Suresh, for your recommendations. Have applied for it. Also I have shared your analysis on FB Palghat Gramma Thinnai group.
Dear Mr.Suresh
Thank you very much indeed for suggesting Snowman. On the first day itself it touched 86%. Your suggestions have always been right. Hats off to you. Regards
Hi Raghavan,
How do you know that it touched 86% on 1st day? I mean, does these statictics get published on any site? please let me know.
Regards
i donot have demant account. how to invest in it. Can i get your contact no.
You cannot invest without demat account. Pls contact any demat broker
Thanks for the article. I have applied for this IPO. I hope it will give good returns in 1 or 2 years.
Yay!! Just subscribed for this IPO, my first investment in market 😉 hope this will boost.
hi suresh,
when will it get listed ?
Subscription opens on 26th August and listing would happen between 3-4 weeks
I read somewhere that it will be listed in 12 working days from closing date of this issue.
Hi Suresh! I am having PTC India Financial's 2020 shares bought via IPO. Should I sell these shares and apply for snowman's IPO. Please analyse & guide me for better returns.
Regards
KISHORE TEWANI
Hi Suresh,
Should we consider investing in this IPO after criminal and legal proceedings?
Mahesh, Stock investments invovle risks. Here too. Yes I agree that there is risk element, but considering other strong factors, you can invest. This is what I feel
Hello Suresh Sir,
Wonderla IPO of similar size.. 35% allocated to Retail Investors, almost 8 times over subscribed. Snowman 10% to Retail investors so if same number of investors put money into it then it will be 28 times over subscribed. So chances are only 1 out of 25 investors will get one lot? Is it worth applying?
Also like to know if this IPO is suitable for short term/listing gains or only for medium-long-term investment.
Thank you for the wonderful job you do Sir, My respect!
Vijay K
I agree your points. But I felt we can apply. You can look for listing gains to medium term of 1-3 years.
Dear Suresh,
As this IPO is managed by HDFC securities. I have dmat account with sharekhan. Can you please advise how to invest.
Visit your IPO section in Sharekhan and you can invest. This should open on 26th August
how to invest in this IPO. Should i have to open demant account first for this.
You should have demat account to subscribe for this IPO
The issue seems really expensive, nothing on the table for retail investors at the lower price band.
Dear Suresh,
Is it really worth to invest in a company where still criminal proceedings are pendning against one of the director as well as legal proceedings? Can you please enlighten me, i don't understanad from this perspective
Good analysis of most of the pros and Cons of the IPO. Thanks.
Hi Suresh
I am new to IPO. Can you please let me know how IPO are allotted. I have ICICI direct demat account.
hi Suresh,
i don't have much knowledge so i am asking the below questions –
1) will the shares of this IPO be available only on these 3 days or will it be traded everyday from 26th like the trading which happens in stock market everyday?
2) If it will be listed on stock exchanges and trading happening on it everyday, then whats the advantage of buying stocks of this company within the IPO issue date?
3) And will i be able to sell these shares anytime i want?
thanks for your help!
1) These are available for these 3 days only thru IPO. After 3-4 weeks, these are listed on BSE / NSE. The share price may fluctuate (+ or minus) 2) During IPO, these would not be listed n BSE/NSE. 3) Once these are allocated to you and shares gets listed on BSE/NSE, you would be able to sell from Monday to Fri during market timings
HI Suresh,
One can invest anytime between 26th and 28th right? or should we invest on the first day only?
thanks
You can subscribe to any date. However I observed that I invested on 1st day to Wonderla along with one more friend. My 2 other friends invested on 2nd and 3rd day. They have not received any shares. Only me and my other friend who subscribed 1st day got some shares. I do not know exact logic behind this.
Sir,
D S kulkarni NCD is safe . I want invest 1.5L.if it is safe. I opting for monthly payment.
Pls refer this article. https://myinvestmentideas.com/2014/08/d-s-kulkarni-developers-secured-ncd-aug-2014/
Dear Suresh,
According to your article it seems that the management is not strong they are involved in diff legeal cases. So, Please put some light on the same.
Thanks
Vikas
Vikas, You may need to consider this point, however taking other strong factors into consideration, I felt, you can still invest. You cannot get 100% positive IPO always. Even I am planning to invest in this
Can we approach the Lead Manager HDFC and apply if we have an account. What is the easiest way to apply for people living in Bangalore 🙂
Login to your demat account and just apply in IPO section. If you do not have demat account, it is bad luck for you.
Hi Suresh,
Thanks for your information.
For only listing gain how much quantity i have to buy ? and do you predict the listing rate? how much profit i will get from this?
Thanks
Akhilesh
Aklesh, It is difficult to predict the listing rate. Even it could be lesser than issue price. It depends on investors response. Earlier Wonderla, I was expecting atleast 30-50% profit, but not it is already 150% profit. It is difficult to predict the rate and profit. Let us wait and watch. You need to buy minimum 300 qty
Hi Suresh
Thanks for this good article. Are you also investing in this IPO?
Yes of course
Hi Suresh,
could you let us know how to subscribe this IPO? I called Geojit and they said it was not in their list.
Thank you
Kishore
Pls check with any other stock broker where you might have any other demat account
Hello Kishore, This IPO is now listed on Geojit website. I am also having demat account with BNP. Thanks
Dear Suresh,
Im waitng for last couple of days for your review in this IPO. Appreicate your work and commitment.
Cheers
Parthi