Bengaluru-based Zinka Logistics Solutions Limited, the parent company of logistics unicorn BlackBuck, has filed its draft red herring prospectus (DRHP) with capital market regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO) route.

The public issue of the Accel and Flipkart-backed digital platform for truck operators is a mix of fresh issuance of ₹550 crore and an offer for sale (OFS) of up to 2.16 crore equity shares by promoters and existing shareholders. Under the OFS, three co-founders Rajesh Yabaji, Chanakya Hridaya and Rama Subramaniam together will sell 44.37 lakh shares, while Accel India will offload a total of 52.32 lakh shares. Flipkart subsidiary Quickroutes International will sell 39.73 lakh shares, while Tiger Global will offload 8.83 lakh shares. Among others, International Finance Corporation (IFC) will be selling 17.11 lakh shares, Sands Capital (13.24 lakh shares), and GSAM Holdings (9.27 lakh shares).

As per the DRHP filed with SEBI, the company, operating under the name of BlackBuck, may consider a pre-IPO placement of up to 20% of the size of the fresh issue. If such placement is completed, the fresh issue size will be reduced.

The company has reserved 75% of the offer for qualified institutional buyers, 15% for non-institutional bidders, and remaining 35% for retail investors. The offer also includes a reservation for eligible employees and a discount will be offered to employees bidding under this segment.

Out of ₹550 crore raised from issuance of equity shares, up to ₹200 crore will be utilised for funding sales and marketing costs; ₹140 crore for investment in Blackbuck Finserve Private Limited for financing the augmentation of its capital base to meet its future capital requirements. Besides, ₹75 crore will be used for product development and meet general corporate purposes.

Formed in 2019, Zinka Logistics aims to transform the trucking industry in India by digitally empowering truck operators to manage their businesses and increase their earnings. The company’s BlackBuck app serves as a platform, providing solutions for payments, telematics, load management, and vehicle financing. In fiscal 2024, monthly active truck operators’ engagement on the app was over 16.18 days per month, spending an average of 39.56 minutes daily on the platform.

As of March 31, 2024, Zinka Logistics had an employee strength of 1,783 and 3,638 contract workers. By fiscal 2024, the company had grown its fleet to 963,345 truck operators, up from 482,446 in FY22, representing 27.52% of India’s truck operators. It has a network of 9,395 touchpoints across 628 districts, covering 80% of India’s districts, including all major transportation hubs and 75% of the toll plaza network.

Zinka Logistics processed a gross transaction value (GTV) of ₹17,396.19 crore in payments for fiscal 2024. The payments platform addresses significant expenses for truck operators, such as tolls and fuel. The company partners with FASTag banks and multiple oil marketing companies (OMCs) to offer efficient and secure tolling and fueling solutions, generating revenue through commission margins based on transaction values.

Additionally, the firm offers vehicle financing solutions, enabling truck operators to purchase used commercial vehicles or obtain financing on existing ones. By March 31, 2024, the company had facilitated 4,035 loans amounting to ₹196.79 crore. Revenue from this segment is derived from loan service fees and other charges related to loan disbursal and collections.

For fiscal 2024, the company reported consolidated revenue from continuing operations at ₹296.92 crore, up 69.01% from ₹175.68 crore in FY23. This was attributed primarily to an increase in its average monthly transacting truck operators, leading to increase in its commission income, subscription fees, and service fees.

Axis Capital Limited, Morgan Stanley India Company Limited, JM Financial Limited, and IIFL Securities Limited are the book-running lead managers and KFin Technologies Limited is the registrar of the offer. The equity shares are proposed to be listed on BSE and NSE.

(DISCLAIMER: The views and opinions expressed by investment experts on charteredonline.in are either their own or of their organisations, but not necessarily that of charteredonline.in and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)

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