Tejas Cargo India Limited, based in Faridabad, Haryana, is a logistics company that specializes in providing long-haul supply chain transportation services across India. The company primarily offers Full Truck Load (FTL) services, which cater to industries such as logistics, steel, cement, e-commerce, FMCG, and white goods. Their range of services includes shipment planning, route optimization, fleet selection, documentation, tracking, communication, coordination, and performance evaluation.

Tejas Cargo India is offering a Book Built Issue of ₹105.84 crores through the issue of 63 lakh shares. The subscription period for this IPO begins on February 14, 2025, and ends on February 18, 2025. The allotment date is expected to be February 20, 2025, with a listing date scheduled for February 24, 2025, on the NSE SME platform. The price band for the IPO is set at ₹160 to ₹168 per share, making the market capitalization of Tejas Cargo India approximately ₹401.39 crores at the upper price band of ₹168.

Tejas Cargo India IPO Subscription Details

The lot size for the Tejas Cargo India IPO is set at 800 shares, with a minimum investment for retail investors at ₹1,34,400. High-Net-Worth Individuals (HNIs) are required to invest a minimum of two lots, which totals ₹2,68,800. New Berry Capitals Private Limited is the Book Running Lead Manager, and Bigshare Services Pvt Ltd is the Registrar for the IPO. The market maker for the IPO is New Berry Capitals Private Limited.

Tejas Cargo India IPO Grey Market Premium

As of now, the Grey Market Premium (GMP) for the Tejas Cargo India IPO stands at ₹0, which reflects no significant trading activity before the official listing. This indicates that there is little to no demand or speculation in the grey market, and investors should not rely on this premium to estimate potential gains. The GMP is typically not a reliable indicator of future performance as it is based on unregulated market activity.

Tejas Cargo India IPO Anchor Investors

Tejas Cargo India has raised approximately ₹29.82 crores from Anchor Investors at the upper price band of ₹168 per share. A total of 17,75,200 equity shares have been allocated to anchor investors, indicating a solid interest from institutional players. However, retail investors should not base their decision solely on anchor investments as these investors are often looking for long-term value, which might not align with short-term listing gains.

Tejas Cargo India IPO Objectives

The funds raised through the Tejas Cargo India IPO will be utilized for the following purposes:

1. Purchase of additional trailers to expand the company's fleet, which will support the company's growth and ability to take on more contracts.
2. Meeting working capital requirements to support daily operations and fuel further business expansion.
3. Repayment of borrowings to reduce the company’s debt burden and improve its financial standing.
4. General corporate purposes, including other business needs that arise as part of the company’s ongoing operations.

Tejas Cargo India IPO Financial Performance

Tejas Cargo India has shown steady growth in its financial performance over the years. For the fiscal year ending September 30, 2024, the company reported revenues of ₹25,509.17 lakh, with an EBITDA of ₹4,556.20 lakh and a profit after tax (PAT) of ₹874.50 million. This growth trend reflects the company's successful business model and increasing market share in the logistics sector.

The pre-issue earnings per share (EPS) stands at ₹2,206.83, and the post-issue EPS is expected to be ₹5.53 for FY24. The pre-issue Price-to-Earnings (P/E) ratio is 0.08x, and the post-issue P/E ratio is 30.36x, significantly higher than the industry P/E ratio of 19x. These metrics suggest that the IPO is priced at a premium, and investors should carefully consider whether the growth prospects justify this valuation.

Conclusion

While Tejas Cargo India has demonstrated a solid track record and growth in its business, the IPO is considered fully priced, especially considering the high P/E ratio compared to industry peers. The Grey Market Premium (GMP) indicates little excitement in the market, and as such, investors are advised to approach this IPO cautiously. For those looking for listing gains, it may be prudent to avoid this IPO due to the lack of any significant short-term growth indicators.

Investors should focus on the company’s long-term fundamentals and its performance post-listing rather than relying on short-term listing gains. Tejas Cargo India has a strong leadership team and solid business prospects, but the valuation may not offer the same level of upside potential as other opportunities in the market.

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, L.K. Mehta, Shanmuga Hospital.

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