BlackBuck Stock Lists 2.9% Higher Than IPO Price

Nitin Konde, Varun Bhardwaj

Nov 23, 2024 — 3 min read

BlackBuck’s IPO Success: Stock Opens 2.9% Above Issue Price

On November 22, shares of Zinka Logistics Solutions, the parent company of logistics giant BlackBuck, went public on the NSE for INR 280.90, a slight premium of 2.89% over the IPO issue price of INR 273. BlackBuck's shares debuted on the BSE at INR 279.05, which was 2.21% higher than the issue price.

Due to the Maharashtra Assembly elections, BlackBuck's November 21 market debut was postponed by one day. BlackBuck's INR 1,115 Cr initial public offering (IPO) was oversubscribed by 1.8X, with offers for 4.19 Cr shares compared to the 2.25 Cr shares available. The IPO took place between November 13 and November 18.

The Growth of the Company

BlackBuck was established in 2015 as a truck aggregator by Rajesh Yabaji, Chanakya Hridaya, and Rama Subramaniam. Since then, the business has expanded and currently provides a wide range of services, including truck financing, fuel payments, FASTag or toll costs, load management, and telemetry. BlackBuck is a business-to-business marketplace that specialises in full truckload (FTL) transportation between cities. BlackBuck's initial public offering (IPO) consisted of both a new share issuance of INR 550 Cr and an offer for sale (OFS) component of over 2.06 Cr shares.

The retail investor quota was subscribed 1.65 times, whilst the qualified institutional buyers (QIBs) part was booked 2.76 times. While non-institutional investors (NIIs) subscribed to the issuance by 24%, BlackBuck employees oversubscribed their quota by 9.86X.

The Current Valuation of the Company

BlackBuck set its valuation at INR 4,800 Cr in the run-up to the INR 1,115 Cr IPO, which is more than 32% less than its peak valuation of INR 7,100 Cr in 2021. For its IPO, BlackBuck proposed a price range of INR 259 to INR 273 per share. Accel and Flipkart, two early investors, could realise up to five times their gains at the upper price range of INR 273. Nevertheless, companies such as Swedish investment firm VEF AB and Peak XV Partners would record losses on the sale of their fractional stakes.

IPO is Getting Popular Among Startups

With initial public offerings (IPOs) emerging as a crucial means of obtaining funding, the Indian startup scene is undergoing a significant transformation. For the second time in history, mainboard initial public offerings (IPOs) have raised more than INR 1 lakh crore in 2024. Over INR 1.03 lakh billion has been raised through 70 initial public offerings (IPOs) this year, the most since 2007. In contrast, 63 firms raised more than INR 1.19 lakh crore through IPOs in 2021, compared to 100 IPOs that were launched in 2007 and raised INR 34,179 crore.

This remarkable expansion coincides with a slowdown in the global IPO markets, which has seen a 16% drop in capital raised and a 12% drop in listings. India has distinguished itself on the international scene with its distinct blend of economic stability, a flourishing digital economy, and a developing private equity (PE) and venture capital (VC) ecosystem.

This year, there has also been a lot of fundraising activity for SME IPOs. A record INR 7,700 crore has been raised through 215 SME IPOs so far. In contrast, 182 businesses raised a total of more than INR 4,686 crore when they went public last year.