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APSEZ set to pick up 40.25% stake in Snowman Logistics

Separately, Life Insurance Corporation of India (LIC) has picked up a 2 per cent additional stake in APSEZ, taking the state-owned insurer’s total holding in the Adani Group’s port operating arm to 11.82 per cent.

By: ENS Economic Bureau | Mumbai |
December 28, 2019 8:55:57 am
APSEZ set to pick up 40.25% stake in Snowman Logistics On Thursday, APSEZ informed the exchanges that LIC has picked up 2 per cent stake in the company.

Adani Ports and Special Economic Zone (APSEZ) on Friday said it is foraying into cold chain logistics by acquiring a 40.25 per cent stake in Snowman Logistics for Rs 296 crore. Adani Ports’ market capitalisation stood at Rs 73,884.65 crore as of Friday.

Separately, Life Insurance Corporation of India (LIC) has picked up a 2 per cent additional stake in APSEZ, taking the state-owned insurer’s total holding in the Adani Group’s port operating arm to 11.82 per cent.

APSEZ, through its logistics arm, will acquire 40.25 per cent in Snowman Logistics for Rs 44 per share, a 3.2 per cent premium over the market price as on Friday and a 12 per cent premium to the 60-day volume-weighted average price. The transaction is expected to be completed by the end of financial year 2019-20, the company said. As part of the transaction, APSEZ’s wholly-owned subsidiary Adani Logistics, will make a mandatory open offer for a maximum 26 per cent of the public shareholding in the Snowman Logistics. However, the company did not disclose a date for the same. Snowman Logistics is a cold chain logistics firm providing warehousing, distribution and value added services.

Karan Adani, CEO, APSEZ, said the acquisition is in line with the company’s strategy of “moving from port gate to customer gate” and providing integrated logistics services in India. “We will double the capacity in next five years. With focus on increase in utilisation, higher realization from product mix and operational efficiencies, this vertical will help further improve returns of logistics business,” Adani said.

On Thursday, APSEZ informed the exchanges that LIC has picked up 2 per cent stake in the company. Analysts said that LIC picking up stake in any company typically boosts investor confidence. “Until a few quarters back, LIC’s equity investment was more than the entire mutual fund industry combined, so having LIC take a significant stake shows tremendous confidence about the particular stock,” said Pranav Haldea, managing director, PRIME Database Group. Shares of Adani Ports have fallen 5.2 per cent over a one-year period. Over a 10-year period, annualised returns were 14.15 per cent. On Friday, the shares of APSEZ ended the day at Rs 363.65, up 0.04 per cent on BSE. FE

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