Rapid Fleet Management Services is a Chennai-based logistics company offering B2B and B2C tailored road transportation services. The company specializes in streamlining the entire transportation process, from order booking to route planning and shipment tracking. They ensure goods are carefully matched with the appropriate vehicles and monitored in real-time using GPS and FAST-TAG SIM TRACKING systems.

The Rapid Fleet Management Services IPO is a Book Built Issue of ₹ 43.86 Crores, consisting of 22.84 lakh shares through a fresh issue. The IPO subscription period is set to open on March 21, 2025, and close on March 25, 2025. The tentative listing date for the shares is March 28, 2025 on the NSE SME. The IPO price is set between ₹ 183 and ₹ 192 per share, with a market capitalization of ₹ 142.74 Crores at the IPO price of ₹ 192.

IPO Subscription and Allotment

The lot size for the IPO is 600 shares. Retail investors are required to invest a minimum of ₹ 1,15,200, while High-Net-Worth Individuals (HNIs) must invest in 2 lots (1,200 shares), amounting to ₹ 2,30,400. The book running lead manager for this issue is GRETEX CORPORATE SERVICES LIMITED, and BIGSHARE SERVICES PRIVATE LIMITED will serve as the registrar.

Grey Market Premium (GMP)

As of today, the Grey Market Premium for the IPO is ₹ 0, indicating no expected listing gains. The GMP value is reflective of demand and supply factors in the unorganized market, and as such, no real price discovery can be made until the shares are listed. The 0% GMP suggests no potential for short-term gains on the listing date.

Company Financial Overview

Rapid Fleet Management Services has demonstrated consistent growth in revenues, with the revenues from operations for the fiscal year 2024 amounting to ₹ 8,739.41 lakh. This is slightly lower than ₹ 11,632.15 lakh in 2023 and ₹ 10,602.58 lakh in 2022, but still reflects a stable performance in the logistics sector. The EBITDA for 2024 stood at ₹ 1,385.39 lakh, compared to ₹ 1,770.49 lakh in 2023 and ₹ 1,263.57 lakh in 2022. The Profit After Tax (PAT) for 2024 was ₹ 701.34 lakh, up from ₹ 471.34 lakh in 2023 and ₹ 339.59 lakh in 2022, showing a strong upward trajectory.

Key Metrics

• Pre-issue EPS (Earnings Per Share) for FY24 is ₹ 16.14.
• Post-issue EPS is ₹ 10.86 for FY24.
• Pre-issue P/E ratio stands at 11.90x, while the post-issue P/E ratio is 17.68x.
• ROCE (Return on Capital Employed) for FY24 is 32.59%.
• ROE (Return on Equity) for FY24 is 50.09%.
• RoNW (Return on Net Worth) for FY24 is 40.06%.
• The Annualized EPS based on the latest financial data is ₹ 27.58 with a PE ratio of 6.96x.

These financial metrics indicate that the IPO is fairly priced. Despite consistent growth in revenues and profits, the no listing gains expectation combined with the low GMP suggests that investors may not see immediate returns.

IPO Objectives

The net proceeds from the Rapid Fleet Management Services IPO will be utilized as follows:

1. ₹ 1,302.37 Lakhs for the purchase of goods carriages (vehicles).
2. ₹ 3,678.30 Lakhs for meeting working capital requirements.
3. The remaining funds will be used for general corporate purposes.

Investment Recommendation

Given the company’s steady financial growth, strong metrics, and fair pricing, but also the absence of listing gains and low Grey Market Premium, we recommend potential investors to avoid the Rapid Fleet Management Services IPO if they are looking for short-term listing gains. However, the company’s consistent profit growth and healthy returns on capital employed may appeal to those with a long-term investment horizon.

In conclusion, the Rapid Fleet Management Services IPO may offer stable long-term prospects in the logistics sector, but investors seeking immediate returns from listing gains should reconsider.

The Upcoming IPOs in this week and coming weeks are Arisinfra Solutions Limited, Grand Continental Hotels, Rapid Fleet Management Services.

The Current active IPO are Paradeep Parivahan, Divine Hira Jewellers.

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