Zinka Logistics Secures Rs 501 Crore from Anchor Investors Before Upcoming IPO

Zinka Logistics Solutions Ltd, a digital platform for truck operators, has raised over Rs 501 crore from anchor investors. This occurred just before its initial public offering (IPO) opened for public subscription. The anchor investors include SBI Mutual Fund, Bandhan Mutual Fund, Invesco Mutual Fund, ICICI Prudential Life Insurance Company, Nomura, Steadview Capital Mauritius, TIMF Holdings, and Hornbill Orchid India Fund.

The company allocated 1.84 crore equity shares to 26 funds at Rs 273 each. This price is the upper limit of the price band, making the total transaction size Rs 501.33 crore. The IPO, valued at Rs 1,115 crore, will be available for public subscription from November 13 to 18, with a price range of Rs 259-273 per share.

IPO Structure and Allocation

The IPO consists of a fresh issue of shares worth Rs 550 crore and an offer for sale (OFS) of up to 2.06 crore shares. The OFS by promoters and investor selling shareholders is valued at Rs 565 crore at the upper end of the price band. Proceeds from the fresh issuance will be used for various purposes.

Specifically, Rs 200 crore will go towards sales and marketing initiatives. Additionally, Rs 140 crore will be invested in Blackbuck Finserve to support its capital base for future needs. Another Rs 75 crore will fund product development expenses, with some funds allocated for general corporate purposes.

Company's Digital Transformation Efforts

Zinka Logistics aims to revolutionise India's trucking industry by digitally empowering truck operators. Their BlackBuck app offers a comprehensive platform that includes solutions for payments, telematics, load management, and vehicle financing. This digital approach helps operators manage their businesses more efficiently and increase earnings.

In the three months ending June 30, 2024, Zinka Logistics processed a Gross Transaction Value (GTV) of Rs 5,356.20 crore and payments worth Rs 17,396.19 crore in fiscal year 2024. The platform addresses significant expenses like tolls and fuel for truck operators.

Financial Performance and Partnerships

The company collaborates with FASTag banks and multiple oil marketing companies (OMCs) to offer efficient tolling and fueling solutions. Revenue is generated through commission margins based on transaction values. For the three months ending June 2024, revenue from continuing operations was Rs 92.17 crore with a profit after tax of Rs 28.67 crore.

Seventy-five per cent of the issue size is reserved for qualified institutional buyers. Non-institutional buyers have been allocated 15 per cent, while retail investors have the remaining 10 per cent reserved for them.

Axis Capital, Morgan Stanley India Company, JM Financial, and IIFL Capital Services are serving as the book-running lead managers for this issue.