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SJ Logistics IPO (NSE SME) entails to raise Rs 48 crores. The issue is entirely a fresh issue of 38.4 Lac shares. Company is engaged in the business of providing logistics and supply chain solutions. Their key services include freight forwarding, custom clearance and transportation handling services.

About SJ Logistics:

• Company is engaged in the business of freight forwarding, logistic, custom clearance and project transportation. Over the years, we have established relationship with major inland transport service providers, ship-line and airline carriers through our market standing and extensive business networks.
• Company has a total strength of 20 employees.
• They started the business as a proprietorship concern during the year 2000. Later, during the year 2003, considering the market demand and business opportunity in the logistics and freight forwarding business, “SJ Logistics (India) Private Limited” was formed and since then, they have grown their presence, expanded the scope of services, and increased capabilities in the business of freight forwarding.
• They have over the years increased the ambit of services covering services which includes multimodal transportation, regulatory compliance like custom clearance and other related services.
• They are also engaged in handling of project cargo, which require detailed planning and technical experience. The project handling service includes providing solutions to meet specific customer requirements for the transport of oversized, over dimension’s cargo, critical or high value cargo’s such as power generating set, excavator, transmission tower etc. from one location to another using multiple modes of transport. The transport of oversized, over dimension’s cargo, critical or high value cargo’s are generally handled on a turnkey contract basis.
• They operate from registered office situated at Thane and our international logistics operations are supported by a network of partners and vendors that enables them to service client requirements across India and abroad as well.
• They deliver international logistic services by using air, sea and surface, as modes of transportation. The regulatory compliance services include customs clearance which is undertaken through mutual understanding with their network and connection formed over years. Further, they can issue House bill of lading for the consignments moving from India to Brazil through their agency arrangements which provides an additional layer of security to customers for their goods moving from India to these countries.
• Company has two subsidiary companies namely SJA Logisol India Private Limited (“SJALIPL”) and S. J. L. Group (Singapore) Pte. Ltd. SJA Logisol India Private Limited is engaged in the business of providing services of transportation and logistics services.
• The company is promoted by Rajen Hasmukhlal Shah, who has an industry experience of around 33 years.

Financials: SJ Logistics

Anchor: SJ Logistics IPO

SJ Logistics IPO: Salient Points

• The logistics sector in India was valued at US$ 250 billion in 2021, with the market predicted to increase to an astounding US$ 380 billion by 2025, at a healthy 10%- 12% year-on-year growth rate.
• They follow an asset light model. rely on commercial ocean freight carriers and NVOCC for the shipment of client’s cargo from one port to another.
• Further they are also dependent on CHA agents for custom clearance and upon various third parties for supply of assets and services, which inter-alia includes, vehicles for inland transportation of goods, containers for carrying goods, warehouses for storage etc.
• Issue proceeds will be used for:

•  Key Performance Indicators

• Revenues have been increasing over the years and profits has shown a even more firm trend.
• They are also engaged in the business of ODC, heavy lift transportation and project cargo.
• The Company intends to increase its area of operations to cater to domestic customers with ease & increase in business revenues
• The Company has already entered into an Agency Agreement dated September 07, 2023 with its customer Alpha TND Limited, Ghana for providing DAP ( Delivered at Place) services in Africa and work order dated September 29, 2023 for Tower Shipments from Transrail Lighting Limited. Further, the company intends to increase its revenue from Project Cargo which involves end to end services right from picking of cargo from origin to delivery of cargo at destination. As this is a long process, it has long payments cycle, which block further working capital of the Company. Also, the company has recently taken warehouse on lease at Thane, Maharashtra. The company will be providing warehousing & distribution services to its existing customers and new customers. The Company is also planning to operate as NVOCC (Non-Vessel Operating Common Carrier). The Company has already entered into Agency Agreement dated October 16, 2023 with Good Voyage Shipping Services operating in Middle East to represent as its Agent in India.
• The company is member of agency networks namely Africa Logistics Network & PPL Network.
• The company has entered into agency agreement with different logistic service providers in different location and countries. As per the arrangements entered with them both the parties will provide logistic services related to movement of the cargo, custom clearance and other related services in India and the location where the other partner is located.
• During the fiscal 2023, they have processed over 3100 bill of lading to countries/ areas including African countries, South American countries, Australia, Bangladesh, European countries, Gulf counties, south east Asian countries, Russia, United States of America etc. Apart from this, our company have entered into mutual cooperation or agency agreements with parties located in countries like Ecuador, Brazil, Chile, Peru, United States of America, Paraguay, Bolivia, Hongkong, China, Taiwan, Vietnam and other countries for our logistics and freight forwarding business for inward and outward movement of the cargo and performing all required operations and documentation work for the cargo movement to and from India to the abovementioned countries.
• Below date represents the bill of lading processed by our company for last 3 years, product-wise and geography-wise bill of lading processed for the Fiscal 2023 (on statndalone Basis)

• Majority of their revenues are dependent on the export of yarn and yarn commodities. For the period September 30, 2023 and during the fiscal 2023, 2022 and 2021 they derived approximately 47.20%, 68.19%, 74.65% and 58.80% of revenue from providing logistics services to the customers engaged in yarn business.
• As per the RHP, the company has shown Cargotrans Maritime, Patel Integrated, Tiger Logistics and Total Transport as their listed peers.

• SJ Logistics IPO is coming at a PE ratio of 23.8x(fy23 earnings) and 9.7x (fy24 annualized earnings)
• I intend to apply in SJ Logistics IPO subject to availability of funds.
• GMP as reported on social media has been around Rs. 75.
• Hem securities is the Lead Manager to the issue. The IPOs lead managed by them have given a good return to the investors. These include names like Paragon Fine And Specialty Chemicals, E Factor Experiences Limited, Arabian Petroleum Limited, ,Saakshi Medtech and Panels Limited, Kahan Packaging Limited, Asarfi Hospital Limited, Kaka Industries, Green Chef, Vasa Denticity, Chaman Mettalics, Hemant Surgicals, Labelkraft, Concord Control Systems Limited, Earthstahl & Alloys Limited, Silicon Rental Solutions Limited, Krishna Defence and Allied Industries, Prevest Denpro Limited etc.
• SME IPO are more risky than mainboard IPOs.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.