Zinka Logistics Solutions, the parent company of the BlackBuck platform, offers a comprehensive range of services aimed at the logistics and trucking industry. Through its platform, it provides vehicle financing, telematics, a load marketplace, and payment solutions, all designed to empower truck operators and streamline their business operations. BlackBuck’s services, such as toll and fuel payments, vehicle and fuel level tracking, and load matching, are critical for the efficient management of logistics businesses.

Founded with the goal to revolutionize the logistics sector, BlackBuck enables its customers to manage day-to-day business operations effectively and at a reduced cost. The platform’s broad functionality helps reduce inefficiencies, offering a solid foundation for a growing sector.

Zinka Logistics IPO: Key Facts
The Zinka Logistics Solutions IPO, which is a fixed price issue, seeks to raise ₹1,114.72 Crores, split into a ₹550.00 Crore fresh issue and ₹564.72 Crore offer for sale. The price band for the shares has been set between ₹259 and ₹273 per share, and the lot size is 54 shares. The IPO will open for subscription on November 13, 2024, and close on November 18, 2024. Investors can expect the final allotment status to be released on or about November 19, 2024, with the tentative listing date set for November 21, 2024.

Subscription Status and GMP
As of November 14, 2024, the Zinka Logistics IPO has been subscribed 0.32 times on its second day. The Grey Market Premium (GMP) stands at ₹0, suggesting no early listing gains based on current market sentiment. The Grey Market Premium reflects the supply-demand dynamics in an unregulated environment but is not a reliable indicator of actual listing price movements.

Objectives of the IPO
Proceeds from the fresh issue will be allocated toward various growth and operational needs:

1. ₹2,000 Million will be used for sales and marketing efforts.
2. ₹1,400 Million will fund investments in BlackBuck Finserve Pvt Ltd, the company’s NBFC subsidiary, to increase its capital base.
3. ₹750 Million will support product development expenditure.
4. Remaining funds will be used for general corporate purposes.

Financial Overview
Zinka Logistics Solutions, though an established player in the logistics tech space, has not yet achieved profitability. For fiscal years 2024, 2023, and 2022, the company posted negative EBITDA and losses after tax (PAT). Specifically:

• Revenue from operations for FY 2024 was ₹3,165.14 Lakhs, compared to ₹1,950.92 Lakhs in FY 2023 and ₹1,561.28 Lakhs in FY 2022.
• EBITDA for FY 2024 stood at a loss of ₹-1,387.80 Lakhs, improving from a higher loss in the prior two years.
• PAT for FY 2024 was a loss of ₹-1,669.86 Lakhs, indicating that the company is still struggling to generate profits despite increasing revenues.

Valuation and Market Metrics
The company’s price-to-earnings (P/E) ratios—pre-issue at -30.13x and post-issue—do not reflect a positive trend. Moreover, its industry P/E ratio stands at a high 305.96x, suggesting that the IPO is priced at a significant premium compared to industry norms. The company’s return on capital employed (ROCE) and return on equity (RoE) for FY 2024 were both negative, reflecting inefficiencies and challenges in generating value for shareholders.

Given the negative financials and lack of clear profitability, the IPO’s valuation could be considered fully priced. The market sentiment is subdued, as reflected in the flat Grey Market Premium.

IPO Recommendation
Based on the financial performance, ongoing losses, and negative metrics such as EBITDA and PAT, investors should approach the Zinka Logistics Solutions IPO with caution. While the company is operating in a promising sector and offers a platform with immense potential, the financials indicate a high-risk investment at this stage.

Investor Advice

• For Listing Gains: Investors should be cautious about expecting listing gains, given the negative financial outlook and flat GMP.
• For Long-Term Investment: Given the ongoing losses and market conditions, long-term investments in this IPO may not yield the expected returns in the near future.

Investors should carefully evaluate the potential risks before committing to the IPO, especially considering the lack of profitability and high valuation in comparison to the industry’s average.

The Upcoming IPOs in this week and coming weeks are Lomosaic India, C2C Advanced System, Rosmerta Digital, NTPC Green, Avanse Financial and Nisus Finance.

The Current active IPO are Zinka Logistics Solution (Black Buck), and Onyx Biotec.

For more insights into financial trends , visit our Top News Headlines. You can also explore investment opportunities in the market and apply for upcoming IPOs through our Best IPO to Apply Now section.