Business profile of the Zinka Logistics Solutions Limited
India's largest digital platform for truck operators, BlackBuck, has 963,345 users in Fiscal 2024, accounting for 27.52% of the country's truck operators. The platform aims to digitally empower these operators, helping them manage their business and grow their income. The BlackBuck mobile application processed ₹173,961.93 million in payments in Fiscal 2024, enabling truck operators to manage their tolling and fueling operations, purchase telematics services, find loads, and access financing for used vehicles. The BlackBuck App has a strong user base, with monthly transactions lasting over 16.18 days and an average of 39.56 minutes daily. The company follows an omnichannel customer onboarding and servicing strategy, with a digital-led marketing strategy that provides awareness of its solutions and brand. The BlackBuck platform has the largest physical network across India, selling and servicing products across 628 districts and a digitally enabled network of 9,395 touchpoints for onboarding and servicing activities.
The Main Objectives to Launch the Zinka Logistics Solutions IPO
The Zinka Logistics Solutions IPO issue will be mix of offer for sale and fresh issue.
- The OFS consist of up to Up to 20,685,800 shares, aggregating to Rs. 1,114.72 crores. The company will not receive any funds from the proceeds of the OFS.
- The fresh issue consists of Rs. 5500 million. The utilization of funds is mentioned in table below.
| Particulars | Estimated amount proposed to be financed from Net Proceeds | Estimated utilisation of Net Proceeds | ||
| Funding towards sales and marketing costs | 2000 | 750 | 750 | 750 |
| Investment in Blackbuck Finserve Pvt Ltd for augmentation its capital base | 1400 | 1400 | Nil | Nil |
| Funding of expenditure in relation to product development | 750 | 250 | 250 | 250 |
| General corporate purposes | [●] | [●] | [●] | [●] |
| Total | [●] | [●] | [●] | [●] |
(in ₹ million)
IPO Details of Zinka Logistics Solutions Limited:
| IPO Open Date | November 13, 2024 |
| IPO Close Date | November 18, 2024 |
| Basis of Allotment | November 19, 2024 |
| Listing Date | November 21, 2024 |
| Face Value | ₹1 per share |
| Price | ₹259 to ₹273 per share |
| Lot Size | 54 Shares |
| Total Issue Size | 40,832,320 shares |
| Aggregating up to ₹1,114.72 Cr | |
| Fresh Issue | 20,146,520 shares |
| Aggregating up to ₹550.00 Cr | |
| Offer For Sale | 20,685,800 shares of ₹1 |
| Aggregating up to ₹564.72 Cr | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not less than 75% of the Net Issue |
| Retail Shares Offered | Not more than 10% of the Net Issue |
| NII (HNI) Shares Offered | Not more than 15% of the Net Issue |
Zinka Logistics Solutions IPO Issue Price & Size
The issue price of Zinka Logistics Solutions has been set for Rs. 259 to Rs. 273. The company has an OFS of 20,685,800 equity shares and fresh issue of Rs. 5500 million.
Launch Date of Zinka Logistics Solutions IPO
The IPO of this company is launching on November 13, 2024, hence the opening date for bidding is November 13, 2024 and the IPO is closing on November 18, 2024. Investors can bid in this IPO between these days during the primary market hours.
Zinka Logistics Solutions Financial Statements
| FY24 | FY23 | FY22 | |
| Continuing operations | |||
| Income | |||
| Revenue from operations | 2969.22 | 1756.8 | 1193.26 |
| Other income | 195.92 | 194.12 | 241.54 |
| Other gains/ losses (net) | - | - | 126.48 |
| Total income | 3165.14 | 1950.92 | 1561.28 |
| Expenses | |||
| Employee benefits expense | 2869.27 | 2195.54 | 2160.8 |
| Finance costs | 27.95 | 31.96 | 171.26 |
| Depreciation and amortisation expense | 253.35 | 204.07 | 152.5 |
| Other expenses | 1657.62 | 1866.78 | 1377.83 |
| Other gains/ losses (net) | 26.05 | 19.38 | - |
| Total expenses | 4834.24 | 4317.73 | 3862.39 |
| Restated (Loss) before tax from continuing operations | -1669.31 | -2366.81 | -2301.11 |
| Restated (Loss) for the year from continuing operations (A) | -1669.86 | -2368.49 | -2303.49 |
| Discontinued operations | |||
| (Loss) from discontinued operations before tax | -269.63 | -536.49 | 542.15 |
| Tax expenses on discontinued operations | - | - | - |
| Restated (Loss) from discontinued operations (B) | -269.43 | -536.49 | 542.15 |
| Restated (Loss) for the year (A+B) | -1936.49 | 2904.98 | 2845.64 |
| Key metrics | FY24 | FY23 | FY22 | |
| Key Operating Metrics | ||||
| Annual transacting truck operator | units | 963345 | 761871 | 482446 |
| Year-on-year growth | % | 26.44 | 57.92 | - |
| Average monthly transacting truck operator | units | 597.638 | 458025 | 261304 |
| Year-on-year growth | % | 30.48 | 75.28 | - |
| Monthly to annual truck operator ratio | % | 62.04 | 60.12 | 54.16 |
| Monthly transacting users using at least two services services | units | 259011 | 152151 | 54417 |
| Year-on-year growth | % | 70.23 | 179.6 | - |
| Gross transaction value of payments for Fiscal Year | ₹ in million | 173961.9 | 121945.9 | 80031.82 |
| Year-on-year growth | % | 42.66 | 52.37 | - |
| Total number of payments transactions for Fiscal Year | units in million | 413.34 | 298.61 | 190.72 |
| Year-on-year growth | % | 38.42 | 56.57 | - |
| Key Financial Metrics | ||||
| Revenue from continuing operations | ₹ in million | 2969.22 | 1756.8 | 1193.26 |
| Year-on-year growth | % | 69.01 | 47.23 | - |
| Contribution margin | ₹ in million | 2883.48 | 1769.19 | 1322.33 |
| Year-on-year growth | % | 62.96 | 33.79 | - |
| Contribution margin (%) | % | 91.1 | 90.68 | 92.16 |
| Adjusted EBITDA | ₹ in million | 133.35 | -1544.65 | 1205.33 |
Zinka Logistics Solutions Promoters & Shareholding
As per the filled document, the company has three promoters i.e.
| Name of the Promoter | Designation | Equity shares held in company | % of Equity held in company | Offer for Sale |
| Rajesh Kumar Naidu Yabaji | Chairman, MD and CEO | 1,77,09,691 | 10.67% | Up to 2,218,822 |
| Chanakya Hridaya | COO & Executive Director | 1,77,13,548 | 10.68% | Up to 1,109,411 |
| Ramasubramanian Balasubramaniam | Head of New Initiaives and an Executive Director | 1,77,09,691 | 10.67% | Up to 1,109,411 |
Should You Subscribe to Zinka Logistics Solutions IPO or Not
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Strengths of the Company:
India’s largest digital platform for truck operators
Zinka logistics is India's largest digital platform for truck operators, facilitating over 413.34 million transactions for 963,345 annual transacting operators. The company offers services across 628 districts, serving 27.52% of operators and 32.92% of commercial vehicle tolling payments. Their business model focuses on providing a digital platform for truck operators to manage tolling and fueling payments, track fleets, find loads, and finance used vehicles.
Strong network effects of platform
The company's platform has successfully built a strong network of truck operators, attracting more partners and fostering loyalty and engagement. Over nine years, the company has built a nationwide network of truck operators through targeted digital and telemarketing campaigns and effective on-ground teams. This has led to a growth in the customer base of annual transacting truck operators from 482,446 in Fiscal 2022 to 963,345 in Fiscal 2024. The platform's ability to facilitate additional payment transactions, more active telematics devices, and other essential services has made it increasingly appealing to partners seeking access to the wide network.
The company focuses on addressing challenges faced by truck operators in India by creating innovative solutions. Because of that strong feedback management, the platform has managed to retain 93.51% of the annual transacting truck operators who transacted on the platform for the first time in Fiscal 2021, while revenue retention rates have increased consistently due to an increase in transactions, pricing, and services used by truck operators.
Strong promoter and management team; asset-light business model
Zinka logistics has a strong promoter and management team with relevant experience and considerable understanding of the domestic logistics industry. Its asset-light business model, supported by a proprietary technology platform, provides it with the ability to raise sizeable equity capital from private equity (PE) investors.
Risk Factors of the Company:
Witnessed Losses and negative operating cash flows
Zinka Logistics Solutions and its subsidiary, TZF Logistics Solutions Private Limited, have experienced losses and negative operating cash flows in the past. For expanding its business and strengthening its network, the company has made investments in sales & marketing to the tune of ₹1,577.77 million, ₹1,777.10 million, and ₹1,028.71 million. Failure to increase revenues could prevent the company from achieving profitability in the future.
Dependence on business segment
The company’s platform offers many services like payments, telematics, loads marketplace, and vehicle financing services to its customers. As can be seen from table below payments and telemetric segment composes big chunk of revenue for the company. Any events affecting payments and telematics, such as government regulations, new payment methods, electronic toll collection technologies could adversely affect the business, results of operations, and financial condition.
| FY24 | FY23 | FY22 | ||||
| Particulars | Amount (₹ million) | % of total revenue from continuing operations | Amount (₹ million) | % of total revenue from continuing operations | Amount (₹ million) | % of total revenue from continuing operations |
| Payments and Telematics | 2806.88 | 94.53% | 1708.01 | 97.22% | 1177.18 | 98.65% |
| Other offerings | 162.34 | 5.47% | 48.79 | 2.78% | 16.08 | 1.35% |
| Total | 2969.22 | 100% | 1756.8 | 100% | 1193.26 | 100% |
Highly competitive environment
The logistics industry in India is fragmented, with a small number of large market participants and a majority of unorganized players. Technology-driven disruptions have also been observed in the industry by firms such as ZLSPL. Both incumbents and newcomers are subject to substantial pricing pressure as a result of the intense competition. This limits the company's capacity to boost its bottom line by a good factor.
Significant sales and marketing initiatives
Sales and marketing initiatives are crucial for business growth and operations. These include digital campaigns, marketing collaterals, on-ground presence, channel partner on-boarding, and tele-based communication. The company plans to invest in sales and marketing using a portion of Net Proceeds. These initiatives aim to maintain and enhance BlackBuck's brand, expand customer base, and increase engagement. Future sales and marketing activities may increase, straining financial resources.
How to Apply in Zinka Logistics Solutions IPO?
To apply for the Zinka Logistics Solutions IPO or invest in any listed company in India, you must have a demat account and trading account. Once you have both these accounts you can apply for IPOs in the primary market or buy shares directly from the secondary market through the trading platform provided by the discount brokers or full-service brokers to their clients.
Also Read: Choosing the right broker: Decoding the mystery of lowest brokerage charges
To apply for this IPO through Moneysukh follow the steps given below.
Also Read: What are the Benefits of Demat Account: Advantages & Why you need it
Steps to Apply for Zinka Logistics Solutions IPO:
Step 1: Once the IPO opens you can apply.
Step 2: Open trade.moneysukh.com and log in with your User ID & password.
Step 3: Now find the IPO section and select the Zinka Logistics Solutions IPO.
Step 4: Here you have to fill in various details like price, quantity, and so on.
Note: At the time of applying for any IPO, always bid at the cutoff price before submitting your application.
Step 5: Now make the required payment and submit your IPO application.
Also Read: What to Check Before Buying IPO: Things to Know & Is it Safe
How to Check the Allotment Status of Zinka Logistics Solutions IPO?
The allotment of shares in the IPO is organized after a few days of closing of bidding. Once the allotment date arrives, you can check the allotment status through various online sources like NSE, and BSE and through the website of Moneysukh using your PAN or IPO application details.
Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh
The allotment of shares in the IPOs is highly dependent on the oversubscribe status of the IPOs. Hence, if it is oversubscribed many times, there are less chances of allotment to everyone.
Also Read: How Shares are Allotted in Oversubscribed IPO: Allocation Process
However, if you have been allotted any share in this IPO cit will be credited into your demat account on the date of listing that you can sell in the secondary market. And if there is no allotment of shares in this IPO, then your application money will be refunded into your bank account or the fund will be unblocked if you have applied through ASBA.
