Zinka Logistics Solution IPO: All You Need to Know

Zinka Logistics Solution Ltd. (ZLSL), known for its BlackBuck mobile app, is India’s largest digital platform for truck operators, boasting a user base of 963,345 operators in FY24. This number represents 27.52% of the nation’s truck operators, positioning Zinka as a frontrunner in India’s logistics digitalization efforts. The company’s mission is to empower truck operators with tools for efficient management and income growth.

IPO Details

The IPO will open for subscription on November 13, 2024 and close on November 18, 2024. Here’s a breakdown of the issue:

Share Issuance and Cost Summary

• Equity Issuance: The company initially issued shares at a face value of Re. 1 per share. Between June 2015 and October 2024, additional shares were issued based on this face value.
• Bonus Shares: In June 2024, the company issued bonus shares at a 550-for-1 ratio, significantly increasing the share count for existing shareholders.
• Average Share Acquisition Cost: Over time, the cost for promoters and other key shareholders to acquire shares has varied. The average acquisition cost for shares has increased as the company grew, with values as follows:
  • Earliest Costs: ₹0.0019, ₹0.0036
  • Later Costs: ₹3.88, ₹18.57, ₹52.04, ₹62.71, ₹69.07
  • Recent Costs: ₹132.09, ₹192.14, ₹195.31, ₹308.98, ₹481.84

Zinka Logistics Solution Limited is making steady moves in the logistics space. Check out the key details of their IPO and how it could align with your investment decisions.#ZinkaLogisticsSolution #IPO #Logistics #InvestmentOpportunities #PaytmMoney #InitialPublicOffering

— Paytm Money (@PaytmMoney) November 13, 2024

Use of IPO Proceeds

The funds raised from the fresh issue will be allocated as follows:

Zinka’s Digital Solutions for Truck Operators

Zinka’s platform offers a comprehensive suite of digital tools through the BlackBuck app to address critical needs of truck operators:

1. Payments for Toll and Fuel: Truck operators can manage toll and fuel transactions via BlackBuck, resulting in reduced pilferage and better expense control.
2. Telematics for Fleet Management: Operators can monitor their fleet and drivers using telematics, gaining insights into vehicle tracking and fuel usage.
3. Marketplace for Load Bookings: The platform helps operators fill empty truck capacities and optimize load pricing.
4. Financing for Vehicle Purchase: Zinka facilitates financing for used commercial vehicles, enabling operators to expand their fleet.

Performance Metrics and Market Presence

Zinka has developed a hybrid customer onboarding strategy tailored to India’s unique truck operator demographics. The company’s network covers 628 districts and 76% of toll plazas across India.

Zinka’s Performance Metrics and Market Presence

The company’s average EPS over the past three years stands at ₹-11.00, with an average Return on Net Worth (RoNW) of -55.77%. The IPO pricing is based on a Price-to-Book Value (P/BV) ratio of 14.60 (pre-IPO NAV of ₹18.70) and 5.38 post-IPO NAV of ₹50.71.

Industry Insights: The Indian Trucking Landscape

India’s trucking industry, comprising approximately 12.5 million trucks and 3.5 million operators, has witnessed an 8-9% CAGR in freight value over the past four years. However, the sector remains fragmented, with 75% of operators owning fewer than five trucks. Zinka’s platform aims to address inefficiencies caused by fragmentation and the heavy reliance on cash transactions.

IPO Merchant Bankers and Track Record

The joint Book Running Lead Managers (BRLMs) for Zinka’s IPO include Axis Capital Ltd., Morgan Stanley India, JM Financial, and IIFL Capital Services. KFin Technologies is the registrar. Out of the 86 issues handled by these managers in the past three fiscals, 23 have closed below the offer price on listing.