Premier Roadlines is set to launch its Initial Public Offering (IPO) with a book built issue worth Rs 40.36 crores, entirely comprising a fresh issue of 60.24 lakh shares. The subscription for the IPO commences on May 10, 2024, and concludes on May 14, 2024, with the allotment expected to be finalized by Wednesday, May 15, 2024.

The anticipated listing date on NSE SME is slated for Friday, May 17, 2024. The IPO price band is established at ₹63 to ₹67 per share, with a minimum lot size of 2000 shares, necessitating a minimum investment of ₹134,000 for retail investors and ₹268,000 for High Net Worth Individuals (HNIs) for 2 lots (4,000 shares).

Hem Securities Limited acts as the book running lead manager, with Maashitla Securities Private Limited serving as the registrar, and Hem Finlease operating as the market maker for the Premier Roadlines IPO.

Issue includes a public Issue of up to 60,24,000 Equity Shares of the Company at an Issue Price of ₹ 67 per Share. Fresh Funds will be utilized towards:

1. Repayment and/or pre-payment, in full or part, of certain borrowings availed by Company
2. Purchase of vehicle for commercial purpose
3. To meet working capital requirements
4. General Corporate Purpose

Company is considering to order these specialized modular hydraulic axles and puller tractor trailer vehicles as these vehicles are used to carry heavy over dimensional/overweight cargos and after acquisition of these assets company shall either deploy them on equipment rental basis for a particular period which may range upto 12 months or may deploy them for a particular project or assignment to be undertaken from one place to another.

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About Premier Roadlines Limited

The company is engaged in providing logistics solutions to businesses, particularly surface transportation of goods ranging from 1 MT to 250 MT. Premier Roadlines Limited, is a goods transport agency providing general transport services, project logistics, and over dimensional/overweight cargo movements on a Pan India basis to customers.

The company provides point-to-point services in which the goods are loaded from the premises of the customer and are delivered to the delivery point as specified by them. The company has served 26000 orders mainly serving B2B customers under the Contract Logistics division, with needs to transport bulk quantities of their goods from one place to another within India and other neighboring countries like Nepal, Bhutan etc.

The company engages with third party operators i.e. small fleet owners and agents providing necessary transportation facilities such as containerized trucks, Trailers, Hydraulic axles etc.

With centralized information technology, they can connect branch offices with corporate office, enabling real time monitoring of operations, consignment bookings and delivery status. Business is run from registered office in Delhi and 28 Branch Offices located in various cities of India. Few customers includes KEC International Limited, ThyssenKrupp Industrial Solutions (India) Private Limited, Tata Project Limited, G R Infraprojects Ltd, Tata Power Solar Systems Limited, Sterlite Power Transmission Limited etc.

The Indian logistics industry is growing, due to a flourishing e-commerce market and technological advancement. The logistics sector in India is predicted to account for 14.4% of the GDP. The industry has progressed from a transportation and storage-focused activity to a specialized function that now encompasses end-to-end product planning and management, value-added services for last-mile delivery, predictive planning, and analytics, among other things.

The sector in India was valued at US$ 250 billion in 2021, with the market predicted to increase to an astounding US$ 380 billion by 2025, at a healthy 10%-12% year-on-year growth rate. Moreover, the government is planning to reduce the logistics and supply chain cost in India from 13-14% to 10% of the GDP as per industry standards.

Risk associated to issue:

• Dependence on third party service providers: Company do not have own fleet and are heavily dependent on third party service providers (i.e. Small Fleet Owners and Agents) to effectively carry on logistics operations.
• Major portion of revenue comes from certain geographical regions: Currently, company delivers services to around 32 states & Union Territories in India. Sales from top ten geographical regions for the period ending January 31, 2024 & fiscal 2023, 2022 & 2021 comprises of 83.50%, 72.98%, 75.55% & 80.71% of total revenue respectively.
• Dependent on the road network: Transportation business is dependent on the road network. There are various factors which affect road transport such as political unrest, bad weather conditions, natural calamities, regional disturbances, breakdown of the vehicles, fatigue or exhaustion of drivers, improper conduct of the drivers/ motormen, accidents or mishaps and third-party negligence.
• Inadequate insurance: Insurance coverage may not be adequate to protect against certain operating hazards and this may have a material adverse effect on business.
• High competition: Operate in a highly competitive industry, dominated by a large number of unorganized players. Increased competition from other organized and unorganized third-party logistics providers may lead to a reduction in revenues.