Zinka Logistics IPO - Should You Apply? Read Anand Rathi's Analysis

Anand Rathi Report

Zinka Logistics Solutions Ltd. will launch its initial public offering on Nov. 13 and the offer closes for subscription on Nov. 18. India’s largest digital platform for truck operators has set a price band of Rs 259-273 per share. The minimum order lot for bidding is 54.

The Rs 1,114.7-crore IPO consist of a fresh issue of shares worth Rs 550 crore, and an offer for sale of up to Rs 565 crore.

Objects of the Issue

• Funding towards sales and marketing costs.

• Investment in Blackbuck Finserve Pvt Ltd, the NBFC subsidiary for financing its future capital requirements.

• Funding of expenditure in relation to product development.

• General Corporate Purposes.

Valuation & Outlook

Zinka Logistics Solutions is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators in the country transacting on its platform in FY24, which comprises 27.52% of India’s truck operators. The company generates revenue from truck operators through commission income from the company’s payment’s offerings, subscription fees from a combination of telematics, payments and loads marketplace offerings and service fees from vehicle financing offering.

In terms of financial aspect, from being a loss making entity, company turned profitable in Q1 FY25.

At the upper price band company is valuing at Mcap/Sales of 16.2x on FY24 basis with a market cap of Rs 48,178 million post issue of equity shares. On the valuation front, we believe that the company is fairly priced. Therefore, we recommend a “Subscribe - Long term” rating to the IPO.

Click on the attachment to read the full IPO report:

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