Zinka Logistics Solutions, a digital platform for truck operators, mobilised over ₹501 crore from anchor investors on Tuesday, a day before its initial share-sale opening for public subscription.
The company allotted 1.84 crore equity shares to 26 funds at ₹273 a piece, which is also the upper end of the price band. This aggregates the transaction size to ₹501.33 crore.
According to a circular uploaded on BSE’s website, the anchor investors are SBI Mutual Fund (MF), Bandhan MF, Invesco MF, ICICI Prudential Life Insurance Company, Nomura, Steadview Capital Mauritius, TIMF Holdings, and Hornbill Orchid India Fund.
₹1,115 crore IPO will be available for public subscription from November 13 to 18 at a price range of ₹259-273 apiece and lot size of 54 shares.
Zinka Logistics Solutions IPO issue size is ₹1114.72 crore, comprising fresh issue, aggregating to ₹550 crore, and an offer for sale, aggregating to ₹564.72 crore. The money raised from the issue will be utilised to fund sales and marketing costs, invest in its NBFC subsidiary, fund product development expenditure, and for general corporate purposes. Its shares will be listed on the NSE and BSE.
Incorporated in 2015, Zinka Logistics Solutions Limited is India’s largest digital platform for truck operators as of FY24.
It operates the BlackBuck app and offers payments, telematics, a loads marketplace, and vehicle financing services to truck operators. It provides tolling solutions in partnership with FASTag partner banks and fuelling solutions in partnership with multiple oil marketing companies (OMCs). It also offers real-time visibility into fleet movements, matches truck operators with load shippers, and offers financing solutions to buy used commercial vehicles.
The company generates its revenue through commissions from FASTag Bank partners and OMCs in fueling transactions. It also generates revenue from monthly or annual subscription fees for its telematics solutions and service fees from our vehicle financing offering.
Between FY22 and FY24, it saw a CAGR rise of over 35% in its revenue from operations. However, it has consistently incurred losses amassing ₹284 crore, ₹290 crore, and ₹193 crore in FY22, FY23, and FY24, respectively. Nevertheless, the Indian trucking sector is a $18 to $25 billion revenue pool in FY24 and is expected to reach $35 billion by FY28, which could indirectly benefit the company.
Zinka Logistics Solutions IPO Details
Zinka Logistics IPO Date
According to the offer document filed by the company with SEBI, the Zinka Logistics Solutions IPO’s opening date – in other words, the Zinka Logistics Solutions IPO launch date – will be 13th November 2024. The Zinka Logistics Solutions IPO closing date is 18th November 2024. After this, investors will be updated about the allotment status on 19th November 2024.
Investors who have been allotted shares can expect them to be credited to their demat account on 20th November 2024. The Zinka Logistics Solutions IPO listing date is 21st November 2024. The listing date is the date on which a company’s shares are listed on the bourses—NSE and BSE.
Zinka Logistics IPO Price Band
The IPO is a fresh issue as well as an offer for sale. The Zinka Logistics Solutions IPO price band has been set between ₹259 and ₹273 per share. Interested investors can choose a price within this band to apply for the IPO.
The Zinka Logistics Solutions IPO listing price will be determined on 21st November 2024. The listing price is the price at which a company’s shares debut on the stock exchanges.
Zinka Logistics IPO Lot Size
The Zinka Logistics Solutions IPO details have been declared. The Zinka Logistics Solutions IPO lot size is set at 54 shares, and an investor can apply for a minimum of 1 lot. Meanwhile, the Zinka Logistics Solutions IPO issue size is approx ₹1114.72 crore.
Zinka Logistics IPO Objective
Zinka Logistics Solutions intends to utilise its net proceeds to fund sales and marketing costs, invest in its NBFC subsidiary, fund product development expenditure, and for general corporate purposes.
About Zinka Logistics SolutionsIncorporated in 2015, Zinka Logistics Solutions Limited is India’s largest digital platform for truck operators as of FY24. It comprises 27.52% of India’s truck operators, with over 9.63 lakh truck operators in the country transacting on its platform. It operates the BlackBuck app and offers payments, telematics, a loads marketplace, and vehicle financing services to truck operators. It provides tolling solutions in partnership with FASTag partner banks and fuelling solutions in partnership with multiple oil marketing companies (OMCs). It also offers real-time visibility into fleet movements, matches truck operators with load shippers, and offers financing solutions to buy used commercial vehicles. The company generates its revenue through commissions from FASTag Bank partners and OMCs in fueling transactions. It also generates revenue from monthly or annual subscription fees for its telematics solutions and service fees from our vehicle financing offering. As of 30 June 2024, it had 390,088 average monthly active telematics devices and 0.71 million load postings, which enabled 133,369 truck operators and disbursed 5,109 loans amounting to ₹252 crore. It also had a gross transaction value (GTV) in payments of ₹5356 crore in Q1 FY25. The company follows an omnichannel customer onboarding and servicing strategy. As of 30 June 2024, it has a digitally enabled network of 9,374 touchpoints to conduct onboarding and servicing activities, selling and servicing its products across 80% of India’s districts and 76% of the toll plaza network. Between FY22 and FY24, it saw a CAGR rise of over 35% in its revenue from operations. However, it has consistently incurred losses amassing ₹284 crore, ₹290 crore, and ₹193 crore in FY22, FY23, and FY24, respectively. Nevertheless, the Indian trucking sector is a $18 to $25 billion revenue pool in FY24 and is expected to reach $35 billion by FY28, which could indirectly benefit the company. Now, Zinka Logistics Solutions Limited is launching its initial public offer (IPO). The total IPO issue size is ₹1114.72 crore, comprising fresh issue, aggregating to ₹550 crore, and an offer for sale, aggregating to ₹564.72 crore. The money raised from the issue will be utilised to fund sales and marketing costs, invest in its NBFC subsidiary, fund product development expenditure, and for general corporate purposes. Its shares will be listed on the NSE and BSE. Company Name: Zinka Logistics Solutions Limited Company Established On: 20 April 2015 Company Type: Public Limited Company CEO/MD: Rajesh Kumar Naidu Yabaji Financial snapshot
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Zinka Logistics Solutions IPO Analysis
Strengths and opportunities
- India’s largest digital platform for truck operators, having facilitated over 413.34 million transactions for 963,345 annual transacting truck operators in FY24.
- Strong network effects of the platform result in higher customer retention rates. Its platform retained 93.51% (in the first year), 76.04% (in the second year) and 66.25% (in the third year) of the annual transacting truck operators who transacted on its platform for the first time in FY21.
- Repeatable playbook of creating and launching new offerings with quick customer acceptance, as it took 33 months for 100,000 customers to subscribe to its payment offerings.
- As of 30 June 2024, the omnichannel distribution and sales network includes an 843-member telesales unit and 587 channel partners.
- Scalable and reliable in-house technology with multiple layers for app and business, partner integration, and platform and big data.
- Predictable revenue streams include tolling and fueling payments, which are daily use cases for truck operators, and telematics, which has monthly recurring subscription fees.
Risks and threats
- The company and its subsidiary has experienced losses and witnessed negative operating cash flows consistently in the last three fiscals.
- It depends on OMC partners, FASTag bank partners, and financial partners for its business offerings, and the loss of any such partners might result in a loss of business and revenue.
- The company intends to invest a portion of its net proceeds in its subsidiary, Blackbuck Finserve Private Limited, which has no established operating history.
- Business operations are subject to constantly evolving laws and regulations.
- Fluctuations in the road transportation industry and fuel prices may impact freight volumes and truck capacity, adversely affecting its business.
- Faces a high attrition rate for its employees of about 41% in FY24.
- Vehicle financing exposes it to various risks in relation to high-risk borrowers and collateral recovery.
- Business is subject to seasonality, resulting in fluctuations in its results of operations and finances.
- It faces competitive pressure in its NBFC business from Shriram Finance, ICICI Bank, IDFC First Bank, Axis Bank, HDFC Bank, State Bank of India, and Kotak Mahindra Bank, among others.
