BlackBuck IPO allottees may see tepid listing gains as the shares of the mainboard issue are set to list on the exchanges on November 22 amid weak market sentiments.
The initial share sale of Zinka Logistics, a leading digital platform for truck operators, received a decent subscription of 1.87 times. Meanwhile, the current grey market premium (GMP) is indicating a flat listing for the shares of the company.
Sagar Shetty, Research Analyst at StoxBox however believes that given the company’s strong market presence and industry tailwinds, it provides a good medium- to long-term opportunity for the investors. "The muted opening could also be attributed to the company’s high valuation concern," he added.
On the economic front, the trucking industry is highly fragmented, with approximately 12.5 million trucks and 3.5 million truck operators in Fiscal 2024 traversing Indian roads; the total freight value through trucks has witnessed a steady growth rate of 8 to 9 percent CAGR over the past four years.
Shetty noted that BlackBuck is well-positioned to capitalize on the market growth opportunities with its digital products, which can tackle challenges and inefficiencies and enhance value for truck operators.
Its strategic market expansion and continuous product development will further enhance its market presence and profitability. "Overall, we believe that participants who have been allotted the shares hold it from a medium to long-term horizon, given the company’s robust growth potential," he said.
Narendra Solanki, Head Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers echoed similar views saying that considering the market sentiments, we believe that the listing of the IPO might be flat.
"On the valuation front, we believe that the company is fairly priced. Therefore, we recommend a “SUBSCRIBE - Long term” rating to the Investors of this IPO," he added.
Contrarily, Shivani Nyati, Head of Wealth at Swastika Investmart Ltd. raised concerns on the company's financial challenges, including ongoing losses and negative cash flow.
"Additionally, the company's legal challenges and recent employee layoffs indicate operational difficulties. The low promoter holding further adds to investor skepticism. Given the company's financial performance, operational challenges, and the lack of a clear valuation metric, investors are advised to exercise caution," she stated.
Zinka Logistics, through its Blackbuck platform has established itself as India’s largest digital platform for truck operators, facilitating 413.34 million transactions and capturing 27.52 percent of the truck operator market as of FY24. It addresses core needs of truck operators such as tolling, fueling, fleet tracking, and load matching.
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