Bengaluru-based Zinka Logistics Solutions Limited, the country's largest digital platform for truck operators in fiscal 2024, has filed its draft red herring prospectus (DRHP) with capital market regulator Securities and Exchange Board of India (SEBI) to mop up funds through an initial public offering (IPO).
The IPO, with a face value of ₹1 each, is a mix of fresh issuance of Rs 550 crore and an offer for sale of up to 21.61 million equity shares by promoters and Investor Selling Shareholders. The offer also includes a reservation for a subscription by eligible employees and a discount is being offered to eligible employees bidding in the employee reservation portion.
The offer for sale consists of up to 22.19 lakh equity shares by Rajesh Kumar Naidu Yabaji, up to 11.09 lakh equity shares by Chanakya Hridaya, up to 11.09 lakh equity shares by Ramasubramanian Balasubramaniam, up to 43.09 lakh by Accel India IV (Mauritius) Limited, up to 39.74 lakh equity shares by Quickroutes International Private Limited, up to 17.12 lakh equity shares by International Finance Corporation, 13.24 lakh equity shares by Sands Capital Private Growth II Limited, up to 9.27 lakh equity shares by GSAM Holdings LLC, up to 9.23 lakh equity shares by Accel Growth Fund V L.P., up to 8.83 lakh equity shares by Internet Fund III Pte Ltd.
The company, in consultation with the book-running lead manager, may consider a Pre-IPO placement shall not exceed 20% of the size of the fresh issue. If such placement is completed, the fresh issue size will be reduced.
The offer is being made through the book-building process, wherein not less than 75% of the offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not more than 15% of the offer shall be available for allocation to non-institutional bidders, and not more than 10% of the offer shall be available for allocation to retail individual bidders.
The proceeds from its fresh issuance to the extent of Rs 200 crore will be utilized for funding towards sales and marketing costs, Rs 140 crore for investment in Blackbuck Finserve Private Limited for financing the augmentation of its capital base to meet its future capital requirements, and Rs 75 crore for funding of expenditure in relation to product development and general corporate purposes.
Zinka Logistics is dedicated to transforming the trucking industry in India by digitally empowering truck operators to manage their businesses and increase their earnings. The company's innovative BlackBuck app serves as a comprehensive platform, providing solutions for payments, telematics, load management, and vehicle financing.
As of March 31, 2024, Zinka Logistics had a significant presence, employing 1,783 permanent employees and engaging 3,638 contract workers. By Fiscal 2024, the company had grown its fleet to 963,345 truck operators, up from 482,446 in Fiscal 2022, representing 27.52% of India's truck operators. The company's extensive reach is reflected in its network of 9,395 touchpoints across 628 districts, covering 80% of India's districts, including all major transportation hubs and 75% of the toll plaza network. This extensive network helps the company onboard and service customers efficiently.
The BlackBuck app, central to Zinka Logistics' offerings, empowers truck operators to manage various aspects of their operations. Through the app, operators can handle payments for tolling and fueling, monitor drivers and fleets using telematics, find loads on the marketplace, and access financing for purchasing used vehicles. In Fiscal 2024, the app saw robust engagement, with monthly active truck operators using it for over 16.18 days per month and spending an average of 39.56 minutes daily on the platform.
Zinka Logistics processed a gross transaction value (GTV) of ₹17,396.19 crore in payments for Fiscal 2024. The payments platform addresses significant expenses for truck operators, such as tolls and fuel. The company partners with FASTag banks and multiple oil marketing companies (OMCs) to offer efficient and secure tolling and fueling solutions, generating revenue through commission margins based on transaction values.
Telematics services provided by Zinka Logistics offer real-time visibility into fleet movements, route optimization, and enhanced fuel management, aiming to improve efficiency and reduce costs. The company had 356,050 average monthly active telematics devices in Fiscal 2024, making it one of the largest players in the vehicle tracking solutions segment for the trucking industry in India.
The loads marketplace within the app helps truck operators find loads to fill their empty capacities or secure better prices. In Fiscal 2024, there were 2.12 million load postings, enabling 256,685 truck operators to obtain loads. This feature significantly enhances the operational efficiency and profitability of truck operators.
Additionally, Zinka Logistics offers vehicle financing solutions, enabling truck operators to purchase used commercial vehicles or obtain financing on existing ones. By March 31, 2024, the company had facilitated 4,035 loans amounting to ₹196.79 crore. Revenue from this segment is derived from loan service fees and other charges related to loan disbursal and collections.
In Fiscal 2024, Zinka Logistics had 259,011 monthly transacting users utilizing at least two services, facilitating over 413.34 million transactions. This reflects the company's success in providing integrated solutions that cater to various needs of truck operators, enhancing their business operations and profitability.
Through a digital-led marketing strategy, Zinka Logistics effectively raises awareness of its solutions and brand among customers. The company's robust infrastructure and innovative solutions have positioned it as a leader in the digital transformation of India's trucking sector, driving growth and efficiency for truck operators across the country.
Zinka Logistics' consolidated revenue from continuing operations increased by 69.01% to ₹296.92 crore in Fiscal 2024 from ₹175.68 crore in Fiscal 2023, primarily due to an increase in its average monthly transacting truck operators, which led to an increase in its commission income, subscription fees, and service fees.
Axis Capital Limited, Morgan Stanley India Company Limited, JM Financial Limited, and IIFL Securities Limited are the book-running lead managers and KFin Technologies Limited is the registrar of the offer. The equity shares are proposed to be listed on BSE and NSE. |
