 "BlackBuck IPO opens today: GMP turns flat; should you subscribe or wait?")
BlackBuck IPO opens today: The initial public offering (IPO) of Zinka Logistics Solution, owner of the digital app platform BlackBuck, opens for public subscription today, Wednesday, November 13, 2024. At the upper end, the company seeks to raise Rs 1,114.72 crore from the public offering by issuing a fresh 20,146,520 shares and an offer for sale (OFS), with promoters and investors divesting 20,685,800 shares at a face value of Re 1 apiece.
BlackBuck has set the price band at Rs 253-273, with a lot size of 54 shares. Investors can bid for a minimum of 54 shares and in multiples thereof. The minimum amount required by a retail investor to bid for one lot of BlackBuck IPO is Rs 14,742.
Meanwhile, the unlisted shares of BlackBuck are trading flat ahead of the opening of its public offering, reflecting a drop from yesterday's grey market premium (GMP). Yesterday, the company's shares were trading at a premium of Rs 24 against the IPO's upper price band, translating to a GMP of 8.79 per cent, revealed sources tracking grey market activities.
The three-day subscription window to bid for the BlackBuck IPO will close on Monday, November 18, 2024. Following this, the basis of allotment is set for Tuesday, November 19, 2024, with shares expected in demat accounts by Wednesday, November 20, 2024.
BlackBuck shares are tentatively scheduled to list on BSE and NSE on Thursday, November 21, 2024.
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Kfin Technologies is the registrar for the BlackBuck IPO, while Axis Capital, Morgan Stanley India Company, JM Financial, and IIFL Securities are the Book Running Lead Managers.
BlackBuck intends to use the proceeds from the fresh issue to fund sales and marketing costs and invest in BlackBuck Finserve, the company’s NBFC subsidiary, for capital augmentation to meet future requirements. The company will also allocate funds for product development and general corporate purposes.
Shoud you Subscribe to the BlackBuck IPO?
Anand Rathi Research Team - Subscribe for long-term
Analysts at brokerage firm Anand Rathi recommend investors subscribe to the BlackBuck IPO for the long term. They highlight that the company is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators in the country transacting on its platform in FY24, accounting for 27.52 percent of India’s truck operators.
"In terms of financials, the company has turned profitable in Q1 FY25 after being a loss-making entity. At the upper price band, the company is valued at an MCap/Sales ratio of 16.2x on an FY24 basis, with a market cap of Rs 4,817.80 crore post-issue of equity shares," analysts wrote.
On the valuation front, the brokerage believes that the company is fairly priced. "Therefore, we recommend a 'Subscribe - Long term' rating to the IPO," said the analysts.
Swastika Investmart - Neutral
Brokerage firm Swastika Investmart has assigned a Neutral rating to the BlackBuck IPO. According to the brokerage, the company is financially challenged, with ongoing losses and negative cash flow, though it has shown signs of recovery in the first quarter of the current year. Low promoter holding may impact investor confidence. Given negative earnings, assessing the IPO on a P/E basis is difficult. Overall, the brokerage suggests that investors may consider skipping this IPO for now.
Bajaj Broking - Subscribe for long-term
Analysts at Bajaj Broking recommend subscribing to the IPO with a long-term perspective. Based on annualised earnings for FY25, they believe the issue is aggressively priced.
"Investors who are well-informed, have surplus cash, and are willing to take risks might consider allocating moderate funds for the long term," said the analysts.
About Zinka Logistics Solutions (BlackBuck)
Incorporated on April 20, 2015, Zinka Logistics Solutions (Zinka) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators in the country transacting on their platform in Fiscal 2024, representing 27.52 percent of India’s truck operators.