Zinka Logistics Solution Limited IPO opens for bidding: Should you subscribe?

Zinka Logistics Solution Limited IPO comprises a fresh issue of 2.01 crore shares, raising Rs 550 crore, along with an offer for sale of 2.07 crore shares, amounting to Rs 564.72 crore.

In Short

• BlackBuck IPO aims to raise Rs 1,114.72 crore
• Price band set at Rs 259-273 per share
• Company is India's largest digital truck platform

The initial public offering (IPO) of Zinka Logistics Solution Limited (BlackBuck) opened for bidding on Wednesday, aiming to raise Rs 1,114.72 crore.

The IPO comprises a fresh issue of 2.01 crore shares, raising Rs 550 crore, along with an offer for sale of 2.07 crore shares, amounting to Rs 564.72 crore.

The price band for the IPO is set between Rs 259 and Rs 273 per share. Retail investors can apply for a minimum of 54 shares, requiring an investment of Rs 14,742. For sNII, the minimum investment is 14 lots (756 shares), totalling Rs 206,388, while bNII investors must invest in 68 lots (3,672 shares), amounting to Rs 1,002,456.

Zinka Logistics Solutions Ltd is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators in the country transacting on its platform in FY24, which comprises 27.52% of India’s truck operators.

The issue also includes a reservation of up to 26,000 shares for employees, available at a Rs 25 discount on the issue price.

Axis Capital Limited, Morgan Stanley India Company Pvt Ltd, JM Financial Limited, and IIFL Securities Ltd are the book-running lead managers, while Kfin Technologies Limited serves as the registrar for the issue.

SHOULD YOU SUBSCRIBE?

An IPO report from Anand Rathi Research Team said that the company generates revenue from truck operators through commission income from the company’s payment offerings, subscription fees from a combination of telematics, payments and loads marketplace offerings and service fees from vehicle financing offering.

"In terms of financial aspect, from being a loss-making entity, the company turned profitable in Q1 FY25. At the upper price band, the company is valued at Mcap/Sales of 16.2x on FY24 basis with a market cap of Rs 48,178 million post issue of equity shares. On the valuation front, we believe that the company is fairly priced. Therefore, we recommend a 'SUBSCRIBE - Long term' rating to the IPO," said the IPO report from Anand Rathi Research Team.

Bajaj Broking also recommended subscribing to the IPO. "We recommend to subscribe the IPO with a long-term perspective," it said.

LATEST GMP

The most recent Grey Market Premium (GMP) for BlackBuck-Zinka Logistics IPO is Rs 0 as of 10:28 AM on November 13, 2024.

With a price band of Rs 273, the estimated listing price for BlackBuck-Zinka Logistics IPO stands at Rs 273 (cap price plus today’s GMP). The projected gain or loss per share is currently 0.00%.

The IPO will open for subscription on November 13, 2024, and close on November 18, 2024. The allotment of shares is expected to be finalised on November 19, 2024, with the listing on BSE and NSE scheduled for November 21, 2024.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)