Gateway to raise Rs 300 cr for rail freight subsidiary

PRIVATE EQUITY WATCH

Logistics provider Gateway Distriparks (GDL) is planning to raise Rs 250-300 crore by way of private equity for its subsidiary, Gateway Rail Freight.

The company has appointed Kotak Bank as the merchant banker for the private placement.

Confirming the development, GDL Managing Director Prem Kishan Gupta said that the company was looking at private placement of around Rs 250-300 crore. GDL intends to use the proceeds for the expansion plans of its rail freight subsidiary.

"We are yet to shortlist any private equity company, even though talks have been on for sometime," he added.

The company will dilute around 15-20 per cent stake to the investor and the deal would be closed in two-three months.

Gateway Rail Freight, an unlisted company, was planning to invest around Rs 1,000 crore in its rail and hinterland terminal business and acquire 30 rigs in next two years. It may list on the bourses, as well.

The company runs six freight trains and intends to double this to 12 by the end of this financial year. Starting next year, the company would add two freight trains every month.

The parent company, GDL was also planning to invest Rs 500 crore in rail logistics subsidiary in the next three years. It will make an initial investment of Rs 150 crore in acquiring rolling stock, including axles, wheels and wagons.

Gateway Rail Freight was formed after Railway Minister Lalu Prasad Yadav privatised certain operations of the state-run Indian Railways in 2004. The company began running container trains, building dedicated railway lines for freight and goods movement, and setting up warehouses and logistics centres.

Malaysian government's investment arm, Temasek Holdings, has 5.5 per cent stake in GDL. This is held through its investment arm Aranada investments.

GDL operates container freight stations (CFS) in Navi Mumbai, Chennai, Vishakapatnam and an inland container depot (ICD) at Gurgaon.