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Economic Times
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Zinka's truck with logistics tech needs a longer profit run
- Zinka Logistics Solutions seeks to raise a total of INR 1,115 Cr ($148m) through an initial public offering in India, consisting of an equity sale of INR 550 Cr ($73m) and an offer for sale totalling INR 565 Cr ($75m).
- The truck logistics service provider is planning to use the funds to finance product development, cover selling and marketing costs, and augment the capital base of its financing division.
- Revenue from continuing operations at Zinka Logistics Solutions increased to INR 2.97bn ($40m) during the period from INR 1.19bn ($16m).
- After reporting operating losses in two years to FY23, the company returned to operating profit before depreciation and amortisation (EBITDA) of INR133m ($1.8m) in FY24, although it still recorded a net loss of INR1.67bn ($22m).
- Zinka Logistics had 390,000 active telematics devices as of June 2021, and 9.6 lakh transacting truck operators on its platform in FY24, reflecting 27.5% of the India's truck operators.
- The promoter stake in Zinka Logistics will fall to nearly 28% after the IPO from over 34%. Among the selling investors, Accel India will reduce its stake to around 0.4% from 3.2%, while Peak XV Partners will reduce its stake to around 1.3% from 2.2%.
- The company has obtained good traction for its services among truck operators but is yet to show meaningful profitability. As such, investors may wait for the company to show sustained profitable growth before making an investment decision.
- The company doesn't have any publicly trading peers.
- Zinka Logistics offers payment solutions for tolling and fueling, telematics services to monitor drivers and fleets, and financing to purchase used vehicles.
- In the June 2024 quarter, the company reported a net profit of INR 32.4 crore ($4.3m), boosted by an exceptional gain of INR25.6 crore ($3.4m).
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