The Pranik Logistics IPO made its debut on the NSE SME today, listing at ₹79, which reflects a modest gain of just 2.5% from its initial public offering (IPO) price of ₹77. This performance highlights a somewhat muted response from the market, particularly given the backdrop of strong subscription numbers during the IPO period.

Pranik Logistics, a prominent logistics service provider in India, specializes in offering comprehensive logistics solutions. Their services encompass everything from material handling and inventory management to transportation, warehousing, and security services. Headquartered in Kolkata, Pranik Logistics is expanding its operations across Eastern India to meet the increasing demands of its clients.

IPO Details and Performance

The Pranik Logistics IPO was a book-built issue amounting to ₹22.47 crores, consisting entirely of a fresh issue of 29.18 lakh shares. The subscription period ran from October 10, 2024, to October 14, 2024, with the allotment expected to be finalized by October 15, 2024. Investors were able to apply within a price band set between ₹73 to ₹77 per share, with a minimum lot size of 1,600 shares, requiring a minimum investment of ₹1,23,200 for retail investors and ₹2,46,400 for high-net-worth individuals (HNIs).

Narnolia Financial Services Limited served as the book-running lead manager, while Maashitla Securities Private Limited acted as the registrar for the issue. Additionally, Prabhat Financial Services Limited played the role of market maker for the IPO.

Subscription Status

As of October 14, 2024, at 06:40 PM, the live subscription status for the Pranik Logistics IPO revealed a substantial demand, with the issue being subscribed 201.30 times on its third day. This indicates a robust interest among investors, even though the initial listing was relatively flat.

The Grey Market Premium (GMP) for Pranik Logistics IPO was anticipated to be around ₹13. The GMP reflects the unorganized market's demand and supply dynamics but should be approached cautiously as it does not provide an accurate price discovery mechanism before the actual listing.

Anchor Investors and Financial Health

In addition to the retail subscriptions, Pranik Logistics raised ₹6.32 crore from anchor investors, pricing shares at ₹77. A total of 8,20,800 equity shares were allocated to these investors, showcasing strong institutional interest in the company.

Analyzing the financial performance, Pranik Logistics reported revenue figures for the fiscal years 2022, 2023, and 2024 of ₹3,360.96 lakhs, ₹6,090.62 lakhs, and ₹6,770.08 lakhs, respectively. This demonstrates a steady growth trajectory. The EBITDA figures for the same years were ₹97.61 lakhs, ₹345.13 lakhs, and ₹934.19 lakhs, indicating significant operational improvements.

The profit after tax for the fiscal years was recorded at ₹31.54 lakhs, ₹93.23 lakhs, and ₹406.56 lakhs, reflecting Pranik Logistics’ increasing profitability. The pre-issue Earnings Per Share (EPS) stood at ₹7.54, while the post-issue EPS is projected at ₹3.96. The pre-issue Price-to-Earnings (P/E) ratio was 10.21x, and the post-issue P/E ratio is estimated at 20.86x, suggesting that the IPO is fairly priced relative to its earnings potential.

The Return on Capital Employed (ROCE) for FY24 is impressive at 54.14%, and the Return on Equity (RoE) is 36.56%, indicating efficient management and operational performance. These metrics support the notion that while the listing may have been flat, the underlying financials portray a growth-oriented company.

Objectives of the IPO

The proceeds from the Pranik Logistics IPO will be allocated towards several key objectives, including:

Investment in Technology: Enhancing operational efficiencies and customer service through improved technological integration.

Capital Expenditure: Investing in necessary infrastructure and assets to support growth.

Working Capital Requirements: Ensuring sufficient liquidity for ongoing operational needs.

General Corporate Purposes: Allowing flexibility for various business needs.

Issue Expenses: Covering the costs associated with the IPO process.

Conclusion

In conclusion, while Pranik Logistics may have debuted on the NSE SME with a flat performance, the strong subscription rates, robust financial growth, and clear objectives for the use of IPO proceeds signal a promising outlook for the company. The logistics sector is poised for continued growth in India, and Pranik Logistics, with its established operational framework and experienced management team, is well-positioned to capitalize on this trend.

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