GB Logistics Commerce Limited, a provider of logistics and agricultural commodity trading services, has launched its IPO with a price band of ₹95 to ₹102 per share. The IPO consists of 24.57 lakh shares and aims to raise ₹25.07 crores. The subscription period is from January 24, 2025 to January 28, 2025, with a listing on BSE SME expected on January 31, 2025.

Business Overview

GB Logistics operates in two primary verticals: logistics and agricultural commodity trading. The logistics business provides full truckload freight services for large and medium-sized enterprises, offering services like special handling, go-down-to-go-down transportation, and delivery above the ground floor. Their solutions are flexible and cater to different transport needs, including handling shipments in out-of-delivery areas.

IPO Financial Highlights

• Price Band: ₹95 to ₹102 per equity share
• Market Capitalization: ₹83.58 crores at ₹102 per share
• Lot Size: 1,200 shares; Minimum Investment for Retail Investors: ₹1,22,400; HNIs: ₹2,44,800 (2 lots)
• Book Running Lead Manager: SKI CAPITAL SERVICES LIMITED
• Registrar: MAASHITLA SECURITIES PRIVATE LIMITED

Steady Financial Performance

• Revenue from Operations (₹ Lakh): FY22 - 11,563.31; Sept 2024 - 5,085.30
• EBITDA (₹ Lakh): FY22 - 847.61; Sept 2024 - 444.03
• Profit After Tax (PAT) (₹ Lakh): FY22 - 486.24; Sept 2024 - 252.80

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for GB Logistics IPO is ₹0, indicating no expected listing gains. Since the GMP is based on unorganized trading, it does not provide a reliable indication of the final listing price. Therefore, the IPO should be assessed primarily on its financials and valuation.

Subscription and Allotment Details

As of 11:40 AM on January 24, 2025, the IPO has been subscribed 2.74 times on its first day, indicating moderate interest. The IPO allotment date is January 29, 2025, and investors can check their allotment status online by following these steps:

1. Visit the IPO allotment status page.
2. Select GB Logistics Commerce Limited IPO from the dropdown.
3. Enter your application number, PAN, or DP Client ID.
4. Submit to check your allotment status.

IPO Objectives

The company plans to use the net proceeds for the following purposes:

1. ₹500 Lakhs for prepayment or repayment of borrowings.
2. ₹937.77 Lakhs for working capital requirements.
3. ₹380 Lakhs for the purchase of truck chassis and truck bodies.
4. General corporate purposes.

Company Strengths

Led by Prashant Natwarlal Lakhani, a seasoned professional with over 30 years in the courier and cargo industry, GB Logistics benefits from extensive leadership and expertise. The company’s diversified approach in logistics and commodity trading allows it to capture growth opportunities in India’s burgeoning transport sector.

Valuation and Conclusion

The pre-issue P/E ratio of 10.55x and post-issue P/E ratio of 17.19x are considerably lower than the industry P/E ratio of 79x, which suggests that the IPO is reasonably priced. However, the 0% GMP and lack of immediate listing gain potential make this IPO a relatively lower-risk, long-term investment.

Given the company’s solid financials, steady growth, and fair valuation, we recommend a hold on this IPO rather than expecting significant listing gains.

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