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Zinka Logistics Solutions Ltd is India’s largest digital platform for truck operators, The platform offers services that digitally manage payments for tolling and fueling, monitor drivers and truck fleet using telematics, loads marketplace and used vehicle financing. Zinka Logistics Solution IPO (BlackBuck IPO) is looking to raise Rs 1,114.72 crores. The issue is a combination of fresh issue aggregating to Rs 550 crores and offer for sale to Rs 564 crores.

About Zinka Logistics Solution Limited:

• They are 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, which comprises 27.52% of India’s truck operators (Source: RedSeer
• Report). Using the platform, customers (primarily comprising truck operators) digitally manage payments for tolling and fueling, monitor drivers and fleets using telematics (i.e., vehicle tracking and fuel monitoring solutions), find loads in the marketplace and get access to financing for the purchase of used vehicles.
• Promoters are Rajesh Kumar Naidu Yabaji, Chanakya Hridaya and Ramasubramanian Balasubramaniam.

• .

Financials :Zinka Logistics Solution IPO

Anchor: Zinka Logistics Solution IPO

Zinka Logistics Solutions Ltd mobilised over Rs 501 crore from anchor investors. The anchor investor includes SBI Mutual Fund, Nomura Trust, Invesco India, Bandhan Mutual Fund, ICICI Prudential Life Insurance, Ashoka Whiteoak, Florida Retirement System, Steadview Capital Mauritius, and Massachusetts Institute of Technology Retirement Trust, etc. 33.43 per cent of the allocation to anchor investors was allocated to three domestic mutual funds through a total of six schemes.

Salient Points: Zinka Logistics Solution IPO

• The Indian trucking industry stands as a vital component of the nation’s logistics sector. There were about 12.5 million trucks and 3.5 million truck operators in Fiscal 2024. The total freight value through trucks has witnessed a steady growth rate of 8 to 9% CAGR over the past 4 years.
• They are India’s largest digital platform for truck operators (in terms of number of users) in Fiscal 2024, which comprises 27.52% of India’s truck operators (Source: Redseer Report).
• Proceeds from the fresh issuance: Rs 200 crore will be used for sales and marketing initiatives; Rs 140 crore for investment in Blackbuck Finserve for financing the supporting the capital base to meet future capital requirements; Rs 75 crore for funding of expenditure in relation to product development, and rest for general corporate purposes.
• Primary sources of revenue are generated through payments (tolling and fueling), telematics, loads marketplace and vehicle financing offerings which include: (a) commission margins from FASTag Bank Partners on the toll transaction flowthrough; (b) commission margin from OMCs in fueling transaction flowthrough; (c) subscription fees charged to truck operators; (d) subscription fees charged to shippers; and (e) interest income, loan service fees and other fees charged to borrowers in the process of loan disbursal and collections.

• Revenue sources

• They derive a significant portion of revenues through commission income (41.09% and 42.86% of total revenue
  from continuing operations in 3 months ended June 30, 2024 and Fiscal 2024, respectively) and subscription
  fees (38.37% and 39.70% of total revenue from operations in the three months ended June 30, 2024 and
  Fiscal 2024, respectively).
• The BlackBuck app is central to their offerings, empowers truck operators to manage various aspects of their operations.
• The BlackBuck App platform providing payments, telematics, loads marketplace and vehicle financing services. These solution digitally empowers truck operators and help them operate their business effectively and efficiently.
• 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.
• 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.
• Company’s customer base of 963,345 truck operators, provides them with the opportunity to offer new products to existing customers and develop newer offerings.
• Largest distributor of FASTags for truck operators in FY24, with a 32.92% market share in GTV payments for tolling. In FY2024, GTV totaled Rs 14,793.67 crore, growing 47.82% YoY.
• Truck operators obtain financing for used commercial vehicles via the BlackBuck platform. As of June 30, 2024, 5,109 loans, totaling Rs 252.75 crore, were successfully disbursed.
• In Fiscal 2024, the blackbuck app saw good traction 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.
• Peers: None

• Zinka Logistics’ consolidated revenue from continuing operations increased by 69.01 per cent to Rs 296.92 crore in FY 2024 from Rs 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.
• Company has transitioned from a loss of Rs.196.5 Crores in FY22 to a net profit of Rs.81.85 Crores in FY24.  However a good chunk of this is due to exceptional and discontinued operations of contract freight business and thus actual profit from operations is much lower.
• I am likely to skip Zinka Logistics Solution IPO. It has some merits as a startup that has just turned profitable and has backing of flipkart promoters & Accel . Not sure if this can justify these valuations in present market conditions.
• GMP as reported on social media is quite low or NIL.
• This post is exploratory and educational purposes only.
• 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.