Bengaluru: BlackBuck’s early investors including Quickroutes International, Tiger Global, Accel and Sands Capital are expected to clock 2-5x gains at the upper end of the price band in the online trucking platform’s upcoming initial public offering (IPO), according to a Mint analysis.
The Bengaluru-based startup expects to raise ₹550 crore in a fresh capital issue and sell up to 20,685,800 equity shares under the offer for sale (OFS) option. The ₹1,114.72 crore IPO was fully subscribed on Monday at 1.20 times. The portion set aside for qualified institutional buyers generated demand for 1.70 times the shares on offer.
The price band has been fixed at ₹259 to ₹273 per equity share with each having a face value of ₹1. The company is valued at ₹4,818 crore, significantly lower than the $1 billion (around ₹8,440 crore today) valuation it sought in its last private round in July 2021 while raising $67 million from Tribe Capital.
Early investors such as Quickroutes International (with an average acquisition cost of ₹52.04 per share); Accel ( ₹62.71) and Tiger Global ( ₹69.07) are expected to reap 3-5x gains by offloading some of their stakes. They are cumulatively selling 11,212,840 equity shares under the OFS.
Other investors including the World Bank’s International Finance Corporation and Sands Capital are also offloading some of their stake but with lesser gains. The promoter group—comprising founders Rajesh Kumar Naidu Yabaji, Chanakya Hridaya and Ramasubramanian Balasubramaniam—is cumulatively selling 4,437,644 equity shares under the OFS.
Peak XV Partners (formerly Sequoia India), which first invested in 2018 at a valuation of a little over $500 million, is making a slight loss on its investment in BlackBuck with an average acquisition cost of ₹308.98 apiece. Swedish fintech investor VEF is also part-selling at a loss with an average buying price of ₹481.84.
BlackBuck, operated by Zinka Logistics Solutions Ltd, plans to use the proceeds towards sales and marketing costs (about ₹200 crore), invest in BlackBuck Finserve Pvt. Ltd for financing the augmentation of its capital base to meet its future capital requirements ( ₹140 crore), product development and other general corporate purposes.
In FY24, BlackBuck reported a revenue from operations of ₹297 crore compared with ₹176 crore a year earlier, according to its filings. Its net loss narrowed to ₹167 crore from ₹237 crore in FY23.
BlackBuck joins the growing list of new-age startups that are tapping the public market at an earlier stage. Swiggy, FirstCry, Unicommerce and Awfis have gone public over the last few months as they took advantage of a bullish stock market. Investors are also looking to sell some of their stake as they sit at the end of the fund life cycle and seek interim liquidity.
“Markets are showing that investors are a variety of speculative, loss-making startups. Startups that can show an ability to generate sustainable profits, and align valuations and investor expectations are more likely to succeed in the markets,” said Natasha Treasurywala, a partner at corporate law firm Desai & Diwanji.
Founded in 2015, Zinka Logistics Solutions’ platform connects a vast network of truck operators, making it a crucial player in India’s logistics ecosystem. It claims to be the largest digital trucking platform that provides payments, telematics, load marketplace and vehicle financing services to enable truck operators run their business effectively. Its customers use the BlackBuck app for day-to-day operations such as tolling and fueling payments. It also counts Apoletto Asia, B Capital, Goldman Sachs and Wellington Management among its investors.
