Zinka Logistics Solutions, the parent company of the BlackBuck brand, is preparing for its stock market debut following the completion of the IPO allotment process earlier this week. Investors who have applied for shares in the BlackBuck IPO can now check their allotment status on the official Bombay Stock Exchange (BSE) website or by visiting the registrar, KFin Technologies, for further updates.
Founded in 2015, Zinka Logistics Solutions operates the BlackBuck platform, which provides a suite of services tailored for truck operators, including digital payments, telematics, a marketplace for loads, and vehicle financing. These services aim to streamline the operations of freight and logistics providers in India, a key sector for the country's economy. The company’s goal is to enhance efficiency in the transportation sector, which remains one of the most significant contributors to India's GDP. By integrating modern technology, BlackBuck seeks to solve longstanding inefficiencies in freight movement, offering tools that help truck owners manage their operations more effectively.
The IPO, which took place between November 13 and November 18, was priced within a band of Rs 259-273 per share, with investors needing to bid for a minimum lot size of 54 shares. Through this issue, Zinka Logistics raised a total of Rs 1,114.72 crore, which comprises Rs 500 crore raised through a fresh issue of shares and Rs 564.72 crore generated from an offer-for-sale by existing shareholders. The fresh issue proceeds are expected to be used for working capital needs, expanding the company’s platform, and improving technology infrastructure.
Despite the strong demand witnessed in some investor categories, the IPO saw an overall subscription rate of 1.86 times. Subscription was notably robust among employees, who subscribed to the offering 9.88 times, as well as among Qualified Institutional Buyers (QIBs), who subscribed 2.76 times the portion allocated to them. However, retail investors subscribed only 1.66 times, and the Non-Institutional Investor (NII) category lagged behind, subscribing just 24% of the available shares. This mixed response signals a somewhat cautious outlook for the stock as it moves toward listing.
Ahead of its stock market debut on Friday, November 22, Zinka Logistics is facing a mixed reception in the grey market. The grey market premium (GMP) for Zinka’s shares has significantly dropped to zero, a sharp decline from the Rs 24 GMP it held before the IPO opened for subscription. This drop signals a potentially weak or flat listing, which is a cause for concern for retail investors hoping for a post-listing gain.
Shivani Nyati, the Head of Wealth at Swastika Investmart Ltd, pointed out that while the company benefits from strong network effects and holds a prominent position in the logistics industry, several red flags could dampen investor enthusiasm. Nyati highlighted financial concerns, particularly Zinka’s ongoing losses and negative cash flow, which raise questions about its ability to deliver sustained growth. Furthermore, the company’s legal issues and recent employee layoffs signal possible operational challenges. Another factor contributing to investor skepticism is the low promoter holding, which suggests a lack of alignment between the company's leadership and public shareholders.Â
Given these considerations, Nyati advised potential investors to approach the stock with caution, suggesting that while the company’s market leadership and business model are promising, its financial health and operational issues may hinder short-term performance. The lack of a clear valuation metric and uncertainty surrounding its future earnings add to the risks, particularly for those looking for a quick return on their investment.
Zinka Logistics Solutions, however, continues to enjoy strong backing from its investors and its market positioning as a leader in India’s growing logistics sector. As the IPO process comes to a close, all eyes will be on how the stock performs when it lists on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) this Friday, November 22. The company’s performance in the stock market will likely set the tone for how other logistics startups are perceived by investors in the coming months.
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