Tejas Cargo India IPO: An In-Depth Review

Tejas Cargo India Limited, based in Faridabad, Haryana, offers long haul supply chain transportation services by road across India. The company primarily caters to industries such as logistics, steel and cement, e-commerce, chemicals, FMCG, and white goods. Their core services include shipment planning, route optimization, fleet selection, tracking, communication and coordination, and performance evaluation.

The company is conducting an Initial Public Offering (IPO) to raise ₹ 105.84 crores, consisting entirely of fresh issue of 63.00 lakh shares. The subscription period for the IPO runs from February 14 to February 18, 2025, with the allotment set for February 20, 2025 and listing scheduled for February 24, 2025 on the NSE SME platform.

IPO Key Details

• Price Band: ₹160 to ₹168 per share.
• Market Capitalisation: ₹401.39 crores at the upper price band.
• Lot Size: 800 shares (₹1,34,400 for retail investors).
• High-Net-Worth Individuals (HNIs): Minimum investment is ₹2,68,800 for 1,600 shares.

Tejas Cargo India is managed by Manish Bindal (Whole Time Director & CEO) and Chander Bindal (Chairman & Managing Director), both of whom have over 14 years of experience in the logistics industry. The company's performance has been steadily improving, with significant growth in both revenue and profitability.

Financial Performance

As of September 30, 2024, Tejas Cargo India recorded a Revenue from operations of ₹25,509.17 lakh. For FY2024, FY2023, and FY2022, the company's EBITDA was ₹4,556.20 lakh, ₹6,903.16 lakh, and ₹3,282.31 lakh, respectively. The Profit after Tax (PAT) for the same periods stood at ₹874.50 million (2024), ₹1,322.22 million (2023), and ₹985.85 million (2022).

EPS Performance:

• Pre-issue EPS for FY24: ₹2.21
• Post-issue EPS for FY24: ₹5.53

With a pre-issue P/E ratio of 0.08x and post-issue P/E ratio of 30.36x (compared to the industry P/E ratio of 19x), the valuation is fully priced, indicating that Tejas Cargo India is focusing on sustainable growth rather than listing gains.

IPO Objectives

The proceeds from the IPO will be used for:

1. ₹31.76 crore for purchasing additional trailers.
2. ₹30 crore to meet working capital needs.
3. ₹15 crore for repayment or pre-payment of borrowings.
4. The remainder will be used for general corporate purposes.

Tejas Cargo India IPO Subscription and Grey Market Premium (GMP)

As of February 18, 2025, the IPO was subscribed 0.83 times. Tejas Cargo India's Grey Market Premium (GMP) remains at ₹0, indicating a lack of trading activity in the unregulated grey market. The GMP trend suggests a cautious market sentiment, with no real price discovery before the official listing.

IPO Allotment Process

The allotment of Tejas Cargo India shares is expected to be completed by February 20, 2025. Investors can check the status of their allotment by visiting the registrar’s website and entering the necessary details, including application number or PAN.

Anchor Investors and Share Allocation

Tejas Cargo India raised ₹29.82 crores from anchor investors by allocating 17,75,200 shares at the issue price of ₹168 per share. These investors are primarily from the Qualified Institutional Buyers (QIBs) reservation portion.

Investor Guidance

• Retail Investors should note the lot size and minimum investment requirements.
• Grey Market Premium being ₹0 suggests minimal speculative interest in the shares before listing.
• Given the company's strong financial performance, the valuation appears reasonable but fully priced for listing gains.

Conclusion: Investors seeking short-term gains from the Tejas Cargo India IPO might find it challenging due to the minimal GMP and fully priced valuation. However, for those with a long-term investment horizon and confidence in the company’s growth trajectory, this IPO might still present a stable investment opportunity.

The Upcoming IPOs in this week and coming weeks are Swasth Foodtech, Beezaasan Explotech, HP Telecom India.

The Current active IPO are Royalarc Electrodes, Tejas Cargo India, Quality Power Electrical Equipments.

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