Shree Shubham Logistics has withdrawn its draft red herring prospectus filed with the Securities and Exchange Board of India (SEBI). The Mumbai-based company filed prospectus for its initial public offering (IPO) on 19 February 2015 and received regulatory blessings on 2 June 2015.
Shree Shubham Logistics is a subsidiary of Kalpataru Power Transmission which owns nearly 73% equity stake in the former.
“The board of directors of Shree Shubham Logistics has decided to withdraw draft red herring prospectus filed with Securities & Exchange Board of India,” Kalpataru Power Transmission said in a filing to the Bombay Stock Exchange.
In the draft prospectus, Shree Shubham Logistics said it wanted to raise up to INR2.1 billion by issuing new shares while also offering an exit route to private equity investor Tano Capital. Tano India Private Equity Fund II was to sell little more than 7 million shares in the company through the public offer.
Shree Shubham Logistics operates and manages a network of over 147 warehouses through a hub and spoke model across the states of Rajasthan, Gujarat, Madhya Pradesh and Maharashtra. The company planned to channel IPO proceeds towards installing new storage capacity and repaying business loans. According to the latest count, the company offers a total storage capacity of around 9.39 million sq. ft. of dry and cold storage space in terms of storable floor plate area.
Apart from warehousing services, the company claims to offer services in commodities procurement, collateral management, funding facilitation, and testing & certification operations. For the year ended 31 March 2015, the Mumbai-based logistics company posted revenue of INR3.14 billion while its earnings stood at INR110 million.
Following the announcement, shares of Kalpataru Power Transmission fell as much as 3% in intraday trading. Shares of the infrastructure company recovered subsequently but closed 1% down in a weak market.
Warehousing and logistics is witnessing renewed action lately with several players receiving private equity funding and a few planning public offers. Sohan Lal Commodity – a competitor of Shree Shubham Logistics – recently concluded a pre-IPO round.