IPO listed on 21 Nov'24
Zinka Logistics Solution Ltd
Minimum Investment
₹ 14,742 / 54 shares
Grey market premium
₹ 0
Issue price
₹ 273
Listing price
₹ 281
Listing day %
-5%
Listing on
Nov 22, 2024
Our Verdict:
Avoid
- Zinka Logistics Solution Ltd (Zinka), which boasts India’s largest digital platform for truck operators via the BlackBuck app, presents financial concerns. Despite a shift to profitability in the recent first quarter, the company has historically suffered from continuous losses and negative cash flows.
- Assessing Zinka’s value on a P/E basis may not be ideal due to its history of negative earnings. Its post-issue EV/Sales ratio works out to approximately 15x at the upper range of the price band. For comparison, international peer Corpay, while not a direct match but operating in a similar industry, currently trades at a cheaper EV/Sales multiple of around 8x.
- Although the company’s strong market presence and favourable industry dynamics may make this issue look appealing initially, the inherent risks currently outweigh the potential benefits.
- Given these factors, long-term investors are advised to monitor the company’s performance closely over the next two quarters before considering an investment.
About the company
Founded in
20 Apr'15
Managing director
Rajesh Yabaji
- Zinka is a leading digital platform for truck operators, hosting 963,345 truck operators on its platform in FY24. Its BlackBuck application provides tools for managing toll and fuel payments, monitoring fleets through telematics, finding loads on its marketplace, and accessing vehicle financing.
- The company partners with FASTag banks and oil marketing companies (OMCs) to offer secure tolling and fueling solutions, generating revenue through commissions based on transaction values.
STRENGTHS
- Market Leadership: As of FY24, Zinka is India's largest digital platform for truck operators, managing over 413.34 million transactions during FY24. It served 27.52% of the country's truck operators, handling 32.92% of all tolling payments for commercial vehicles.
- Leading FASTag Distributor: In FY24, Zinka dominated as the principal distributor of FASTags, capturing 32.92% of the market share in GTV payments for tolling. The Gross Transaction Value reached Rs 14,793.67 crore, marking a 48% growth year-over-year.
- Robust Revenue Growth: Zinka's revenue surged by 69% year-over-year to Rs 297 crore in FY24. This growth was fuelled by an increase in average monthly transacting truck operators, boosting commission income, subscription fees, and service fees.
- Rapid Customer Growth: The number of annual transacting truck operators on Zinka's platform rose to 963,345 in FY24, from 482,446 in FY22. Notably, 85.52% of truck operators who began transactions in FY23 remained active into FY24.
- Extensive Distribution Network: As of June 30, 2024, Zinka’s offerings were available across 628 districts, encompassing 80% of India's districts and including all major transportation hubs, as well as 76% of the toll plaza network in India.
RISK FACTORS
- Weak Financial History: Despite turning profitable in Q1 FY25, largely due to exceptional gains, Zinka and its subsidiaries, TZF Logistics Solutions and BlackBuck Finserve, have historically struggled with losses and negative operating cash flows. There is uncertainty about sustaining this recent profitability.
- Dependence on Key Partnerships: A substantial portion of Zinka’s revenue is linked to strategic partnerships in payment processing and vehicle financing. Notably, a FASTag partner bank represented 33.51% of its total revenue in FY24. The loss of such critical partnerships could severely impact the company's operations.
- Supplier Reliance: Zinka is highly dependent on a few suppliers for its vehicle tracking solutions. In Q1 FY25, the top supplier accounted for 80.71% of total purchases for these solutions. Any disruption in the supply chain could pose significant risks to business continuity.
- High Employee Attrition: Zinka has experienced significant employee turnover, with attrition rates of 37% in Q1 FY25 and 41% in FY24, which could affect stability and growth.
Issue details
Issue type
Mainstream
Issue size
₹ 1,114.72 crore
Fresh Issue
₹ 550 crore
OFS
₹ 564.72 crore
Price range
₹ 259 - 273
Lot size
54 shares
Issue Objective
Zinka intends to use the net proceeds from the issue for the following purposes:
- Fund sales and marketing costs;
- Invest in its NBFC subsidiary, Blackbuck Finserve Pvt Ltd, for capital base augmentation;
- Fund product development; and
- General corporate purposes.
Dates
Bidding open
13 Nov'24
Bidding close
18 Nov'24
Allotment date
19 Nov'24
Refund date
20 Nov'24
Listing
21 Nov'24
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
This document has been issued by Liquide Solutions Private Limited for information purposes only. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall Liquide Life Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.