Shares of Zinka Logistics Solutions will be listed at the bourses on Friday following a successful IPO. The company has fixed the IPO price as ₹273, at the upper end of the price band ₹259-273. The IPO was receiving subdued investors’ interest but sailed through due to late hour bidding by institutional investors.
The IPO was subscribed 1.86 times.
The employee portion was the bright spot with 9.88 times subscription, followed by QIBs (2.76 times) and retail investors (1.66 times). The Non-Institutional Investors (NIIs) segment showed only a minimal interest and remained undersubscribed at 0.24 time.
Shivani Nyati, Head of Wealth at Swastika Investmart, said: the current grey market premium (GMP) of 0 per cent indicates a potential for a flat or even negative listing.
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The IPO was a mix of fresh offer of up to ₹550 crore and an offer for sale of up to 2.07 crore shares worth ₹564.72 crore by Promoter and Investor Selling Shareholders - Promoters and founders: Rajesh Kumar Naidu Yabaji, Chanakya Hridaya, and Ramasubramanian Balasubramaniam; and investors Quickroutes International (earlier known as Flipkart Logistics), Accel India, International Finance Corporation, Internet Fund, Peak XV Partners Investments, VEF AB (publ) and Sands Capital.
The logistics major had garnered ₹501 crore from anchor investors ahead of its initial public offering by allocating 83,63,915 shares at ₹273 a share on Tuesday to anchor investors. Foreign and Domestic Institutions that participated in the anchor include Nomura, Hornbill Orchid India Fund, Steadview Capital Mauritius, TIMF Holdings, Florida Retirement System, Massachusetts Institute of Technology, Carmignac Portfolio, BNP Paribas Funds, Pinebridge Global Funds, and Societe Generale. SBI Mutual Fund, Invesco India, Bandhan Mutual Fund, ICICI Prudential Life Insurance, Ashoka Whiteoak, SBI General Insurance, and Nuvama Multi Asset Strategy Return Fund. Out of the total allocation of 1.83 crore equity shares to the anchor investors, 61.39 lakh shares were allocated to 3 domestic mutual funds through 6 schemes.
The funds raised will be used for sales and marketing, investing in Blackbuck Finserve Private Limited to expand its capital base, product development expenses, and general corporate purposes.
The company’s strong network effects and position as a leading platform in the logistics industry are positive factors, she said.
“However, financial challenges, including ongoing losses and negative cash flow, raise concerns. Additionally, the company’s legal challenges and recent employee layoffs indicate operational difficulties. The low promoter holding further adds to investor skepticism,” Shivani said adding that given the company’s financial performance, operational challenges, and the lack of a clear valuation metric, investors are advised to exercise caution.