Introduction:
Investing in Initial Public Offerings (IPOs) allows you to acquire shares of promising companies at reasonable prices. It, in turn, helps you gain exciting returns in the long term or upon listing. But before investing in an IPO, you should analyse several factors, including the issuing company’s financials, strengths, weaknesses, and prevailing market conditions.
One such IPO that is making waves in the financial markets is the S J Logistics IPO. The company, engaged in the business of logistics and supply chain services, plans to raise up to Rs. 48 crores through its IPO. Continue reading to delve into the details of S J Logistics IPO, including the issue, price band, lot size, and more. Analysing these details can help you make a well-informed investment decision.
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Overview of the Issuing Company
S J Logistics (India) Limited is one of the leading logistics and supply-chain solution providers in India. It offers a gamut of services, including freight forwarding, customs clearance, and transportation handling. The company runs two subsidiary companies – S J A Logisol India Private Limited and S J L Group (Singapore) Pte. Ltd. The company provides its services across diverse geographical boundaries.
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During the fiscal year 2023, the company handled 3,100 bills of lading destined for multiple countries across the globe, encompassing Africa, South America, Australia, Europe, the Gulf, Southeast Asia, Russia, and the United States. It also forged collaborative partnerships with counterparts in Ecuador, Brazil, Chile, Peru, the United States, Paraguay, Bolivia, Hong Kong, China, Taiwan, Vietnam, and various other locations for logistics and freight forwarding.
Key Strengths of the Company
Analysing the issuing company’s strengths can give you an idea of its future growth prospects and make an informed investment decision. Below are the key strengths of S J Logistics (India) Ltd. as mentioned in the Red Herring Prospectus (RHP):
- The company has established relationships with diverse clients across the globe
- It offers a wide range of logistics and supply-chain solutions
- A long-standing business with an excellent track record
- Tie-ups and arrangements with several international and national agencies
Key Risks or Weaknesses Highlighted
Analysing the issuing company’s weaknesses can give you an idea of the threats that can hinder its long-term growth. Below are the key risks or weaknesses associated with S J Logistics Ltd.:
- The company derives a majority of its revenue from the export of yarn and yarn commodities
- It is heavily dependent on third-party agencies and suppliers for seamless disbursal of services
- The company does not possess a custom house agent license
- Mishaps such as natural and man-made calamities can disrupt supply chain services
Core Financials of the Company
Analysing the issuing company’s financials is a crucial step in determining whether to invest in an IPO or not. The table below portrays the core financials of S J Logistics Ltd. for the last three complete financial years:
| Particulars |
Period Ended September 2023 |
As of and for FY Ended March 31 |
| 2023 |
2022 |
2021 |
| Share Capital |
11 |
3 |
2 |
2 |
| Net Worth |
56 |
31 |
15 |
13 |
| Total Borrowings |
30 |
34 |
26 |
27 |
| Revenue From Operations |
103 |
134 |
104 |
124 |
| Profit After Tax |
9 |
8 |
2 |
1 |
| Earnings Per Share (Diluted) |
10 |
9 |
3 |
1 |
| Return on Net Worth (%) |
17% |
24% |
12% |
6% |
*Amount in Crores
Source – RHP Dated 5 December 2023 on SEBI website
Details of the IPO
S J Logistics Ltd. aims to raise up to Rs. 48 crores through its IPO, which will be a complete fresh issue of 38.4 lakh equity shares. The price band for the IPO has been fixed as Rs. 121 to Rs. 125 per share. The IPO opens for public subscription on Tuesday, 12 December 2023, and closes on Thursday, 14 December 2023. The tentative listing date is 19 December 2023.
The table below depicts additional details concerning S J Logistics IPO:
| IPO Date |
12 December to 14 December 2023 |
| Basis of Allotment |
15-Dec-23 |
| Listing Date |
19-Dec-23 |
| Face Value |
Rs. 10 per share |
| Price Band |
Rs. 121 to Rs. 125 |
| Lot Size |
1000 shares |
| Total Issue Size |
3,840,000 equity shares (Worth Rs. 48 crores) |
| Fresh Issue |
3,840,000 equity shares (Worth Rs. 48 crores) |
| Listing At |
NSE SME |
To conclude
Considering the issuing company’s growing revenues and net worth, S J Logistics IPO seems an attractive investment proposition. You can consider investing for listing gains or long-term profits. However, do not forget to consider the prevailing market conditions and your investment goals before making the final decision. Should you need a Demat account to invest in IPOs, you can get it for free with Motilal Oswal.
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