Zinka Logistics Solution Limited 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 the platform in Fiscal 2024, which comprises 27.52% of India's truck operators. Using the platform, their customers (primarily comprising truck operators) digitally manage payments for tolling and fueling, monitor drivers and fleets using telematics, find loads on the marketplace and get access to financing for the purchase of used vehicles. Truck operators use the BlackBuck mobile application (the 'BlackBuck App') for their diverse business needs. The gross transaction value ('GTV') in payments was Rs 53,562.01 million and Rs 173,961.93 million in the Q1 FY25 and FY24, respectively. The customers recharge for tolling and fueling through the BlackBuck App into the payment instrument of the FASTag and fuel partners. Significant portion of this amount is deposited into the account and onward remitted to the partners account. GTV payments do not represent the revenue of the Company. The commission income in any period/year is only an agreed percentage of the total GTV payments in that period/year. Our methodology of disclosing the GTV may not be comparable to the methodology used by other platform companies. Truck operators purchase telematics services such as vehicle tracking and fuel sensors to manage their drivers and fleets. They had 390,088 and 356,050 average monthly active telematics devices in the Q1 FY25 and FY24, respectively. Truck operators use the loads marketplace product to search for loads to fill their empty capacities or to get a better price for a load. They had 0.71 million and 2.12 million load postings in the Q1 FY25 and FY24, respectively, which enabled 133,369 and 256,685 truck operators to get a load during the same periods. Truck operators avail used commercial vehicle financing through the platform. As on June 30, 2024, they have facilitated disbursements of 5,109 loans amounting to Rs 2,527.56 million. Company follows an omnichannel customer onboarding and servicing strategy, which is made specifically for the demography of the customer base. Using a combination of an on-ground sales force, channel partners and telesales they support customers through their entire onboarding process. Among new-age digital platforms in the trucking sector, they have the largest physical network (in terms of number of Touch-points) across India and as of June 30, 2024, they have sold and serviced the products across 628 districts constituting 80% of India's districts, including in all of the major transportation hubs and across 76% of the toll plaza network in India. They have a digitally enabled network of 9,374 touch-points to conduct onboarding and servicing activities as of June 30, 2024. As per financial performance, Zinka Logistics Solution Limited has posted total income / net profits of Rs 156.13 Cr / Rs (230.11) Cr (FY22), Rs 195.09 Cr / (236.68) Cr (FY23), Rs 316.51 Cr / Rs (166.99) Cr (FY24) and Rs 98.33 Cr / 32.38 Cr (Q1 FY25). So as per previous financials data, company has shown good growth, but making consistent loss except Q1 FY25. Company has an average EPS of Rs (11.09) and average RoNW of (55.77)% for last three fiscals. Issue is priced at a P/BV of 14.6 as per NAV of Rs 18.7/- as on 30.06.24. If we attribute latest earnings of FY23, FY24, TTM and annualised FY25 on equity post issue, then asking price is at a P/E of around NA, NA, NA and 37.2 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, four lead managers are associated with this IPO, and have handled around 136 IPOs in last three fiscals. As per financials, Zinka Logistics Solution Limited has shown good growth, RoNW is (53.64)% and P/E is NA, NA, NA and 37.2 respectively as per FY23, FY24, TTM and annualised FY25 earnings. Company is consistently making losses and some earlier investors are exiting with loss. Company provides digital platform for truck operators with different services, which is very unique business model. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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