Zinka Logistics Solutions Limited, known for operating the BlackBuck platform, offers a range of services to truck operators across India, including payments, telematics, loads marketplace, and vehicle financing. These solutions empower truck operators to run their businesses more effectively by managing day-to-day operations, such as tolling and fueling payments, tracking vehicle and fuel levels, and matching loads for transportation. The company has grown substantially since its inception, with the BlackBuck app becoming integral to the logistics and transport business in India.

Now, Zinka Logistics Solutions is moving forward with an Initial Public Offering (IPO) to raise capital for business expansion and further development of its platform.

Zinka Logistics Solutions IPO Overview

The Zinka Logistics IPO is a Fixed Price Issue that will raise ₹1,114.72 Crores. The offer consists of:

• A fresh issue of 201.46 lakh shares worth ₹550.00 Crores.
• An Offer for Sale (OFS) of 206.85 lakh shares worth ₹564.72 Crores.

The subscription period for the Zinka Logistics IPO begins on November 13, 2024, and ends on November 18, 2024. The price band for the IPO is set between ₹259 and ₹273 per share, with a lot size of 54 shares. Retail investors can invest a minimum of ₹14,742, while High-Net-Worth Individuals (HNIs) need to invest a minimum of ₹2,06,388 for 14 lots.

The market capitalization of Zinka Logistics Solutions at the upper price band of ₹273 per share is estimated at ₹4,817.81 Crores. The shares will be listed on BSE and NSE, with a tentative listing date set for November 21, 2024.

Financial Performance of Zinka Logistics

In terms of financial performance, Zinka Logistics has shown revenue growth, but it continues to face significant losses:

• Revenue for FY24: ₹3,165.14 Lakhs
• EBITDA for FY24: ₹-1,387.80 Lakhs
• Profit after Tax (PAT) for FY24: ₹-1,669.86 Lakhs

Despite its strong position in the logistics tech space, the company has not been profitable in recent years. The pre-issue earnings per share (EPS) stands at ₹-9.06, and the post-issue P/E ratio is not calculable due to negative earnings. This places the IPO at a pre-issue P/E of -30.13x compared to the industry P/E of 305.96x.

IPO Subscription & Grey Market Premium

As of November 14, 2024, the Zinka Logistics IPO was subscribed 0.32 times, indicating weak demand. The Grey Market Premium (GMP) for the IPO stands at ₹0, which suggests that investors do not expect immediate listing gains. This lack of demand in the grey market and the company's financial losses point to no listing gains and low investor enthusiasm.

Investment Recommendation

Given the negative financial metrics, including the low subscription rate and the lack of listing gains indicated by the GMP, we recommend avoiding the Zinka Logistics IPO for both short-term and long-term investments. Despite its presence in the logistics technology market, the company's current performance and valuation do not offer an attractive investment opportunity.

Investors should look for better alternatives with more stable financial performance and growth potential.

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