Zinka Logistics IPO: Public Issue Subscribed 53% On Final Day, GMP Hints Flat Listing; Check Dates & More

The initial public offering (IPO) of Zinka Logistics Solution Limited, the operator of the BlackBuck App, has entered its final stretch, with the issue closing on November 18, 2024. Valued at Rs 1,114.72 crore, the IPO has garnered lukewarm interest from investors, with shares trading at par in the grey market.

IPO Details

The Zinka Logistics IPO comprises a fresh issue of Rs 550 crore and an offer for sale (OFS) worth Rs 564.72 crore. The price band for the public issue is set at Rs 259 to Rs 273 per equity share, with retail investors required to invest a minimum of Rs 14,742 for a lot size of 54 shares. Additionally, 26,000 shares have been reserved for employees, offered at a discounted rate of Rs 25 per share.

The funds raised are earmarked for strategic initiatives, including funding sales and marketing efforts, investing in its non-banking financial company (NBFC) subsidiary, product development, and general corporate purposes.

Post-listing, promoter shareholding is expected to decline from 32.9% to 27.8%. Axis Capital, Morgan Stanley India Company, JM Financial, and IIFL Securities are the book-running lead managers, with Kfin Technologies serving as the IPO registrar.

Subscription Status

Investor response has been underwhelming. As of the second day, the IPO had been subscribed just 0.32 times, with the retail segment at 0.90 times and the non-institutional investor (NII) segment at 0.04 times. The Qualified Institutional Buyer (QIB) portion stood at 0.26 times.

By the third day, as of 1:24 pm, the overall subscription had risen to 53%. The employee portion led with a robust 8.26 times subscription, followed by retail investors at 1.33 times. However, QIBs and NIIs showed subdued interest, subscribing 45% and 11%, respectively.

Grey Market Performance (GMP)

The grey market premium (GMP) for Zinka Logistics IPO remains at zero, indicating that shares are trading at par. Market observers attribute this lack of premium to weak market sentiments, both domestically and globally. Despite the flat GMP, analysts believe a par listing might not be a negative indicator and could improve if market conditions stabilize.

Financial Performance

Founded in 2015, Zinka Logistics operates as a digital ecosystem for truck operators, offering services such as telematics, payment solutions, a load marketplace, and vehicle financing. Its gross transaction value (GTV) reached Rs 17,396 crore in FY24, with an average of 3,56,050 active telematics devices used monthly.

However, the company's financial performance remains a concern:
FY24: Net loss of Rs 193.95 crore on revenue of Rs 316.51 crore.
FY23: Net loss of Rs 290.5 crore on revenue of Rs 195.09 crore.
While losses are narrowing, the firm is far from achieving profitability, which may deter potential investors.

Prominent Backers and Anchor Investors

Ahead of the IPO, Zinka Logistics secured Rs 501.33 crore from anchor investors, lending credibility and initial support to the issue.

About BlackBuck

Zinka Logistics' flagship platform, the BlackBuck App, has transformed India's trucking industry by creating a digital ecosystem for truck operators. Its features include payment solutions, telematics, and vehicle financing. By March 2024, the company had facilitated 4,035 loans worth Rs 196.78 crore.