Continental Warehousing IPO | DRHP IPO Review |

Below is the Review of Continental Warehousing IPO. Continental Warehousing IPO is estimated to go live in mid 2017. As part of the IPO, Continental Warehousing has submitted a Draft Red Herring Prospectus to the SEBI and is now available for Public. Through this IPO, Continental Warehousing is planning to raise around Rs.1,200 Crore from the Public. Continental Warehousing invests in modern logistics infrastructure, offers adequate space to consolidators for handling of Less than Container Load (LCL) Consolidation services. Continental Warehousing started India’s first private Bonded Warehouse way back in 1996. Also Read the IPO Details of DMartGR Infra Limited, Prataap Snacks, Majestic Research and Green Signal Bio.

continental warehousing ipo

Draft Prospectus : Continental Warehousing IPO

DRHP of Continental Warehousing Download

Book Billing Lead Managers : Continental Warehousing IPO

  • Edelweiss
  • Axis Capital
  • Ambit
  • ICICI Securities
  • Link Intime

Brief History : Continental Warehousing IPO

Continental Warehousing Company was incorporated on May 23, 1997 at Mumbai as a public limited company under the Companies Act, 1956 and obtained a certificate of commencement of business from the RoC on August 5, 1997.

As on the date of filing of this Draft Red Herring Prospectus, Continental Warehousing has 14 Shareholders. For further information, see “Capital Structure” on page 79 of the DRHP.

Operational Risks : Continental Warehousing IPO

Continental Warehousing services and operations are subject to operational risks such as breakdown of equipment, accidents, labor disputes and natural disasters. If any of these risks were to materialize, Continental Warehousing business and results of operations could be adversely affected.

Continental Warehousing operations comprise cargo handling services and express logistics and third-party logistics services and Continental Warehousing operations may be adversely affected by many factors, such as the breakdown of equipment, accidents, labor disputes and natural disasters.

Any significant malfunction or breakdown of Continental Warehousing machinery, equipment or vehicles may entail significant repair and maintenance costs and cause delays in Continental Warehousing operations.

Further, any accident, labor dispute, natural disaster or Continental Warehousing inability to repair malfunctioning machinery, equipment or vehicles in a timely manner or at all, may result in Continental Warehousing operations being slowed down or suspended and cause human fatalities and damage to property which may have an adverse effect on Continental Warehousing business, results of operations and financial condition

Outstanding Debt : Continental Warehousing IPO

As of August 31, 2016, Continental Warehousing total indebtedness was Rs.5,899.06 million. Continental Warehousing ability to meet their debt service obligations and repay their outstanding borrowings will depend primarily on the cash generated by the business.

Growth Strategy : Continental Warehousing IPO

Continental Warehousing have experienced considerable growth over the last few years and they have significantly expanded the operations and services. Between the financial year 2012 to the financial year 2016, Continental Warehousing total revenues increased from Rs.4,497.14 million to Rs.7,093.99 million at a CAGR of 12.1%.

However, Continental Warehousing inability to manage the expansion effectively and execute growth strategy in a timely manner, or within budget, or their inability to meet the expectations of the customers and other stakeholders could have an adverse effect on the business, results of operations and financial condition.

Pending Legal Cases : Continental Warehousing IPO

There are outstanding legal proceedings, including certain criminal proceedings against Continental Warehousing, Directors, Promoters, Subsidiaries and Group Companies.

These proceedings are pending at different levels of adjudication before various courts, tribunals, enquiry officers and appellate tribunals. For instance, Continental Warehousing is involved in two writ petitions with respect to alleged violations of the Customs Act and the Major Ports Act on account of withholding of containers.

Such proceedings could divert management time and attention, and consume financial resources in their defense. Additionally, some properties on which Continental Warehousing is developing projects are also subject to litigation (see “Outstanding Litigation and Material Developments” on page 384 of the DHRP).

A summary of the outstanding legal proceedings against Continental Warehousing, Its Directors, Promoters, Subsidiaries and Group Companies as disclosed in this Draft Red Herring Prospectus, to the extent quantifiable, have been set out below:

Nature of cases Total amount involved (in Rs. million)
Criminal (1 Case) Amount not quantifiable
Direct tax (6 Cases) 956.61

Educational Qualification of Directors : Continental Warehousing IPO

Continental Warehousing Managing Director and Chairman as well as one of their Whole – time Directors do not have any documents evidencing certain information in relation to their educational qualifications.

Continental Warehousing have not included the details of the educational qualifications of one of their Promoters, N. Adikesavulu Reddy, who is also their Managing Director and Chairman, since relevant information is not available for the same.

Negative Cash Flows : Continental Warehousing IPO

Continental Warehousing have had negative net cash flows in the past and may continue to have negative cash flows in the future

For further details, see “Financial Statements” and “Management‘s Discussion and Analysis of Financial Condition and Results of Operations” on pages 181 and 369 of the DRHP, respectively.

Amendments to MoA : Continental Warehousing IPO

Set out below are the amendments to MoA since the incorporation of Continental Warehousing:

Date of shareholders resolution Nature of Amendment
July 18, 2005 Clause V of the MoA was amended to reflect the increase in the authorised share capital of Rs.50,000,000 divided into 5,000,000 Equity Shares of Rs. 10 each to Rs. 500,000,000 divided into 50,000,000 Equity Shares of Rs. 10 each
March 15, 2006 Clause V of the MoA was amended to reflect the increase in the authorised share capital of Rs. 500,000,000 divided into 50,000,000 Equity Shares of Rs. 10 each to Rs. 715,000,000 divided into 50,000,000 Equity Shares of Rs. 10 each and 21,500,000 OCPS of Rs. 10 each
July 14, 2009 Clause V of the MoA was amended to reflect the re-classification of the authorised share capital of Rs. 715,000,000 divided into 50,000,000 Equity Shares of Rs. 10 each and 21,500,000 OCPS of Rs. 10 each to Rs. 715,000,000 divided into 47,000,000 Equity Shares of Rs. 10 each and 24,500,000 CCPS of Rs. 10 each
February 25, 2011 Clause V of the MoA was amended to reflect the increase of the authorised share capital of Rs. 715,000,000 divided into 47,000,000 Equity Shares of Rs. 10 each and 24,500,000 CCPS of Rs. 10 each to Rs. 875,000,000 divided into 63,000,000 Equity Shares of Rs. 10 each and 24,500,000 CCPS of Rs. 10 each

 

Management Team : Continental Warehousing IPO

In terms of the Articles of Association, Continental Warehousing is required to have not more than 10 Directors. As on the date of this Draft Red Herring Prospectus, the Board comprises eight Directors.

  • Adikesavulu Reddy
  • Amrutesh Reddy
  • Darayush K. Jalnawalla
  • Viraj Sawhney
  • M.S. Sundara Rajan
  • B. Ravindranath
  • Brinda Jagirdar
  • G.K. Ravishankar

Closing Statement : Continental Warehousing IPO

Continental Warehousing IPO is likely to be subscribed enough due to the favourable Industry conditions in India. For any further questions on Continental Warehousing IPO, send us your messages at queries@finapp.co.in.