Tejas Cargo India Limited, based in Faridabad, Haryana, is offering a public issue of shares in the form of an IPO to raise funds for expanding its logistics services. The IPO offers a Fresh Issue of 63.00 Lakh shares and is valued at ₹105.84 Crores. The subscription for the IPO opened on February 14, 2025, and closed on February 18, 2025. The IPO price band is set at ₹160 to ₹168 per equity share, and the company is aiming for a market capitalisation of ₹401.39 Crores at the upper end of the price band.

Tejas Cargo India operates in the long haul supply chain transportation services sector, providing express road transportation services under Full Truck Load (FTL) arrangements to a wide variety of sectors, including logistics, steel and cement, e-commerce, FMCG, and industrial chemicals. Their services include crucial elements such as shipment planning, route optimisation, fleet selection, documentation, and performance evaluation. The company's vast network and expertise allow it to offer high-quality services, ensuring seamless delivery for its clients.

IPO Subscription Status and Allotment Process

As of February 18, 2025, the Tejas Cargo India IPO was subscribed 1.14 times on its final day. For those interested in checking the allotment status, the date has been set for February 20, 2025. Investors can access the allotment status online via the registrar's website by providing the necessary details such as application number or PAN. This is a vital step for those looking to track their investments and proceed accordingly with the process.

Grey Market Premium (GMP)

Currently, the Grey Market Premium (GMP) for Tejas Cargo India IPO stands at ₹0, indicating no significant price movement in the unofficial market ahead of listing. While the GMP is a common indicator for potential listing gains, it is essential to understand that GMP figures are not a reliable source for investment decisions and cannot guarantee future performance. Tejas Cargo India's listing price is expected to be aligned with the upper price band of ₹168, but investors should consider all factors carefully before making any decisions.

Financial Performance and Valuation

Tejas Cargo India has exhibited a consistent growth trajectory in its financials, with revenues from operations rising from ₹20,967.03 Lakh in FY2022 to ₹42,259.06 Lakh in FY2023. The company’s EBITDA performance also shows improvement, with a significant rise to ₹6,903.16 Lakh in FY2023 from ₹837.78 Lakh in FY2022. The Profit After Tax (PAT) has grown steadily, indicating the company’s ability to generate positive cash flows from operations, which is a positive indicator for future prospects.

For the FY24, the pre-issue Earnings Per Share (EPS) stands at ₹2,206.83, while the post-issue EPS is expected to be ₹5.53. The company's Price-to-Earnings ratio (P/E) at the upper end of the IPO price is 30.36x, compared to the industry average of 19x, indicating that the stock might be fully priced for its potential returns.

Tejas Cargo India’s Return on Capital Employed (ROCE) for FY24 stands at a strong 28.30%, while the Return on Equity (ROE) is 38.62% and Return on Net Worth (RoNW) is 23.85%. These figures are favorable compared to industry standards, highlighting the company’s profitability and efficient capital utilization.

IPO Objectives and Utilization of Proceeds

The Tejas Cargo India IPO intends to use the funds raised for specific purposes:

1. ₹3,176.29 Lakhs for purchasing additional trailers to expand the fleet.
2. ₹3,000.00 Lakhs for meeting working capital requirements to support ongoing operations.
3. ₹1,500.00 Lakhs for repayment or pre-payment of borrowings, helping to reduce the company’s financial liabilities.
4. The remaining funds will be used for general corporate purposes, supporting the company’s continued expansion.

Tejas Cargo India’s IPO Review and Conclusion

While the Tejas Cargo India IPO offers a solid growth track record, the high valuation might be a concern for some investors, particularly when considering the Price-to-Earnings ratio in relation to the industry average. The Grey Market Premium indicates that the IPO may not offer substantial listing gains, suggesting that investors may not see significant immediate returns from the listing.

In conclusion, Tejas Cargo India Limited appears to be a stable company with strong growth prospects in the logistics sector, but the IPO is fully priced. Investors looking for quick listing gains may not find this IPO to be suitable, and it is recommended that they avoid investing for listing profits. However, for those with a longer-term investment horizon, the company’s growth trajectory and solid fundamentals may present a good opportunity, albeit at a higher entry price.

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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