Blackstone to sink $65m into Indian rail logistics

The global private equity and real estate firm will acquire up to 49.9% of Gateway Rail Freight in its second Indian logistics deal. GRF currently has terminals in Ludhiana, Mumbai and Garhi, with plans to expand to Faridabad.

The Blackstone Group will invest up to INR3 billion ($65 million; €43.4 million) in Gateway Rail Freight (GRF), an Indian rail logistics company.

This is Blackstone’s second Indian logistics sector deal, having previously invested in Allcargo Global Logistics, a private sector logistics operator whose operations include container freight stations, inland container depots and less-than-container-load consolidation.

Gateway Distriparks, GRF’s parent company, informed the stock exchanges that its board and the board of GRF have approved the issue of compulsorily convertible preference shares to Blackstone.

Upon conversion, Blackstone will own between 37.27 percent and 49.9 percent of the share capital of GRF. The investment will be used to fund the company’s growth of operations.

Indian logistics: Blackstone climbs aboard

GRF transports goods like steel, chemicals, paper, meat and grains through containers on railroads. Eighty percent of the company’s business comes from domestic trade while the remainder comes from overseas trade.

The company operates rail-linked terminals with customs facilities and provides rail and transport services. It owns and operates 19 container trains and about 235 road trailers across India. It currently has terminals in Ludhiana, Mumbai and Garhi, and aims to start a fourth rail-linked cargo terminal by the end of this year in the city of Faridabad.

Some of Blackstone's other Indian portfolio companies include construction Nagarjuna Construction, garment exporter Gokaldas Exports and NSL Seeds, a hybrid seed company.