Zinka Logistics Solutions Limited, operating under the brand “BlackBuck,” has submitted its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO).
The IPO, valued at ₹550 crores, will consist of a Fresh Issue and an Offer for Sale, aimed at financing various strategic initiatives and enhancing its market presence in the logistics sector.
Founded in 2015 and headquartered in Bengaluru, Karnataka, Zinka Logistics has rapidly emerged as a leader in digital logistics solutions tailored for the Indian market.
The company’s platform, BlackBuck, connects truck operators with businesses needing freight services, streamlining operations and enhancing efficiency across the supply chain.
Offering Details
The DRHP outlines that the IPO will be a 100% Book Built Offer, comprising a Fresh Issue of Equity Shares and an Offer for Sale of up to 2,16,09,022 Equity Shares by existing shareholders and investors.
The Fresh Issue is expected to raise approximately ₹550 crores, which will be utilized towards strategic objectives as mentioned further.
Selling Shareholders
Key stakeholders participating in the Offer for Sale include prominent names such as Rajesh Kumar Naidu Yabaji, Chanakya Hridaya, and Ramasubramanian Balasubramaniam.
Rajesh Kumar Naidu Yabaji plans to sell up to 22.19 lakh Equity Shares, while Chanakya Hridaya and Ramasubramanian Balasubramaniam each intend to offer up to 11.09 lakh Equity Shares.
Institutional investors also feature prominently in the sale, including Accel India IV (Mauritius) Limited with up to 43.09 lakh Equity Shares, Quickroutes International Private Limited with up to 39.74 lakh Equity Shares, and International Finance Corporation with up to 17.12 lakh Equity Shares.
Additionally, Sands Capital Private Growth II Limited, GSAM Holdings LLC, Accel Growth Fund V L.P., and Internet Fund III Pte Ltd will offer up to 13.24 lakh, 9.27 lakh, 9.23 lakh, and 8.83 lakh Equity Shares respectively.
Financial Performance
According to the pro forma consolidated statement of profit and loss included in the DRHP, Zinka Logistics reported a total income of ₹316.51 crores for the most recent fiscal year, comprising ₹296.92 crores from operations and ₹19.59 crores from other income sources.
However, the company recorded total expenses amounting to ₹483.42 crores, resulting in a loss before tax from continuing operations of ₹166.91 crores.
Despite these figures, Zinka Logistics has maintained robust operational revenue, indicating strong market presence and extensive business activities.
Capital Structure
As of the filing date, Zinka Logistics’ authorized share capital includes 25,00,00,000 Equity Shares with a face value of ₹1 each, totaling ₹25 crores, and 1,45,00,000 Compulsorily Convertible Preference Shares (CCPS) with a face value of ₹10 each, aggregating to ₹14.5 crores.
The issued, subscribed, and paid-up share capital stands at 15,63,30,160 Equity Shares of ₹1 each, amounting to ₹15.63 crores.
Post-IPO, this structure is expected to undergo adjustments in accordance with regulatory requirements and market conditions.
Objectives of the Offer
The Net Proceeds from the Fresh Issue will be allocated towards:
- Funding Sales and Marketing: An allocation of ₹200 crores to bolster market outreach and customer acquisition efforts across key regions.
- Investment in BlackBuck Finserve Private Limited: A strategic infusion of ₹140 crores into the company’s NBFC subsidiary to strengthen its financial base and support future growth opportunities.
- Expenditure related to Product Development: Provisioning ₹75 crores towards ongoing research and development initiatives aimed at enhancing platform features and operational efficiencies.
- General Corporate Purposes: Additional funds, not exceeding 25% of the Gross Proceeds, earmarked for general operational expenses and working capital requirements.
Market Position and Strategic Outlook
BlackBuck operates amidst a rapidly evolving logistics ecosystem in India, characterized by increasing digitalization and demand for efficient freight management solutions.
The company’s innovative approach to leveraging technology, coupled with its extensive network and strong market presence, positions it well to capitalize on emerging opportunities in the sector.
Conclusion
The forthcoming IPO represents a pivotal moment for Zinka Logistics Solutions Limited as it seeks to unlock new growth avenues and expand its market footprint.
With a compelling business proposition backed by solid financial fundamentals and strategic objectives, the IPO is expected to generate significant interest among institutional and retail investors alike.
The IPO’s success will not only facilitate Zinka Logistics’ expansion plans but also contribute to the broader evolution of India’s logistics infrastructure, driving efficiencies and enhancing service delivery across the supply chain.
