Shares of Zinka Logistics Solutions Ltd. made a lacklustre debut on the bourses on Friday following the completion of its initial public offering (IPO). The company’s shares listed at ₹280.90 on the NSE, reflecting a premium of 2.89% as against the IPO allotment price of ₹273.

Similarly, on the BSE, Zinka Logistics shares listed at a premium of 2.2% as against the IPO allotment price, at ₹279.05 today.

Shivani Nyati of Swastika Investmart who expected a flat or even negative listing said the company’s strong network effects and position as a leading platform in the logistics industry are positive factors. However, financial challenges, including ongoing losses and negative cash flow, raise concerns.

Additionally, the company’s legal challenges and recent employee layoffs indicate operational difficulties. The low promoter holding further adds to investor skepticism.

Given the company’s financial performance, operational challenges, and the lack of a clear valuation metric, the analyst advised investors to exercise caution.

The IPO of Zinka Logistics was open for subscription from November 13 to November 18. The company sold its shares in a fixed price band of ₹259-273 per share.

The IPO included a mix of fresh offer of up to ₹550 crore and an offer for sale of up to 2.06 crore equity shares by Promoter and Investor Selling Shareholders.

Ahead of the issue launch, Zinka Logistics had already garnered ₹501 crore from anchor investors like Nomura, Massachusetts Institute of Technology, SBI MF, Invesco India, among others.

The company will use the proceeds from the fresh issue to the extent of ₹200 crore for funding towards sales and marketing costs, ₹140 crore for investment in Blackbuck Finserve Pvt. Ltd. for financing the augmentation of its capital base to meet its future capital requirements, ₹75 crore for funding of expenditure in relation to product development, and general corporate purposes.

Business overview

Incorporated in April 20, 2015, Zinka Logistics Solutions Ltd. is touted to be the country’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators in the country transacting on their platform in fiscal 2024, which comprises 27.52% of India’s truck operators.

Using the company’s platform, their customers (primarily comprising truck operators) digitally manage payments for tolling and fueling, monitor drivers and fleets using telematics, find loads on their marketplace and get access to financing for the purchase of used vehicles.

Truck operators use the BlackBuck mobile application for their diverse business needs.

The company’s gross transaction value (GTV) in payments was ₹5,356 crore and ₹17,396 crore in the three months ended June 30, 2024 and fiscal 2024, respectively.

For the three months ended June 2024, the company’s revenue from continuing operations stood at ₹92.17 crore with a profit after tax of ₹28.67 crore.

Axis Capital Ltd., Morgan Stanley India Company Pvt. Ltd., JM Financial Ltd. and Iifl Securities Ltd. were the book running lead managers to the BlackBuck IPO, while Kfin Technologies Ltd. was the registrar.