Gateway Distriparks rallies nearly 5% on reports that it plans to list rail unit

NEW DELHI: Gateway Distriparks Ltd rallied as much as 4.89 per cent intraday, after media reports suggested that it is aiming to list its rail unit, valued by analysts at nearly $500 million, by the end of the current financial year in March 2016, two sources directly involved in the process told Reuters.

The stock closed at Rs 379.90, up 12.95 points or 3.53 per cent.

According to the report, private equity firm Blackstone, a key investor in unit Gateway Rail Freight, had written to the parent firm in January asking it to consider an initial public offer, according to a company filing at the time.

Blackstone invested around 3 billion rupees ($48 million) in Gateway Rail Freight in 2010, the bulk of that through convertible preference shares. If fully converted, Blackstone could hold a stake of over 40 percent, analysts estimate.

In order to maintain its majority stake after the IPO, Gateway Distriparks is in talks with Blackstone to buy back a five to seven percent stake in the unit, said the report quoting sources. They declined to be named as the talks are not public.