Zinka Logistics listed on the NSE at Rs. 280 per share post-IPO and is currently trading at Rs. 281.70 as of Friday, 22nd November. The company, previously called BlackBuck, has an IPO size of Rs. 1,114.72 crores. Here, we will discuss what this means for investors and what factors caused the logistics company to go in for a muted debut listing. The article also discusses the causes and reasons for the muted grey market premium, the positives, and the stock’s long-term potential.
What the Muted Debut Means for Investors?
Zinka Logistics serves as a leading digital platform for truck operators throughout India.
The stock was subscribed to as many as 1.87 times, which means investor interest in Zinka Logistics remains intact. Growth has been good, although GMP has been mundane. The logistics company has scope for further development, though, with long-term prospects looking good, as the country’s logistics industry is also on the growth path.
The listing could have been better, considering the overall market sentiment and the recent performances of other IPOs. Investors have generally responded positively to the IPO, and so have the markets. However, risk appetites also need to be considered, even with the company’s robust fundamentals, financials, and business models.
The losses and negative cash flows that Zinka Logistics and its subsidiaries have suffered in the last three years also come as setbacks, posing significant risks. Zinka Logistics is also dependent on various OMC partners, including FASTag and other financial partners, and their losses have also profoundly impacted the company’s financial stance.
Zinka Logistics also faces stiff competition from other businesses, particularly those from the financial sector, such as IDFC First Bank, Axis Bank, HDFC Bank, ICICI Bank, and State Bank of India.
The Positives
The stock looks promising despite these shortcomings. It is India’s largest digital platform for truck operators, conducting over 400 million transactions for over 900,000 operators. Zinka Logistics also has a wide distribution and sales network consisting of 843 telesales personnel and 587 partners. The premier logistics company uses advanced technologies and in-house solutions that are scalable and highly reliable. The platform provides multiple layers of business and partner integrations, relying on both platforms and big data.
About Zinka Logistics
Zinka Logistics was founded in 2015 and is India’s largest digital solutions provider for truck operators. The company accounts for nearly 27.52% of all the truck operators in the country, and more than 9 lakh truck operators conduct transactions on Zinka’s platform.
The BlackBuck app offers truck operators various logistics solutions, including telemetrics, payments, and vehicle financing services.
Takeaways
Zinka Logistics may be a good stock worth considering, owing to its solid fundamentals and financial stance, not to mention adaptable business models. It depends on the investors and their risk appetites, though, as the stock did not make a sound debut. However, it is still a strong and prominent player in the logistics market, with the possibility of stock appreciation, especially when invested long term.
Zinka Logistics
