What you must know Oneclick Logistics India IPO?

Oneclick Logistics India Ltd was incorporated in the year 2017 as an integrated logistics solutions provider. Oneclick Logistics India Ltd offers a single-window solution across the logistics services value chain. The company provides the full range of logistics related services, which include container handling, clearing & forwarding, customs clearance, brake bulk handling, brokerage, recovery of claims pertaining to customs & insurance etc. As a value addition, Oneclick Logistics India Ltd also provides its clients warehousing services, distribution & supply chain management, port and terminal operations, and container freight station operations. It has a global client base that is spread across major trading partners of India like China, Europe, Singapore, and Malaysia. The company is active in the government owned ports as well as in the privately owned ports on the East and West coast of India.

Key terms of the Oneclick Logistics India IPO (SME)

Here are some of the highlights of the Oneclick Logistics India IPO on the SME segment of the National Stock Exchange (NSE).

• The issue opens for subscription on 27th September 2023 and closes for subscription on 03rd October 2023; both days inclusive.
   
• The company has a face value of ₹10 per share and it is a fixed price issue. The issue price has been fixed at ₹99 per share. Since it is a fixed price issue, there will be no price discovery required in this case.
   
• The IPO of Oneclick Logistics India Ltd has only a fresh issue component and no offer for sale (OFS) component in the IPO. It must be remembered that the fresh issue portion is EPS dilutive and equity dilutive, but OFS is just a transfer of ownership and  hence it is not EPS or equity dilutive.
   
• As part of the fresh issue portion of the IPO, Oneclick Logistics India Ltd will issue a total of 10,00,800 shares (10.01 lakh shares approximately). At the fixed price of the IPO price of ₹99 per share, the total value of the fresh issue portion aggregates to ₹9.91 crore.
   
• Since there is no offer for sale portion, the fresh issue will also be the total size of the issue. As a result, the total issue size of Oneclick Logistics India Ltd will also entail the issue and sale of 10,00,800 shares (10.01 lakh shares approximately). At the fixed IPO price of ₹99 per share, the total size of the IPO of Oneclick Logistics India Ltd will be₹9.91 crore.
   
• Like every SME IPO, this issue also has a market making portion with a market maker inventory allocation of 52,800 shares. The market maker for the issue will be SS Corporate Services Ltd and they will provide two-way quotes to ensure liquidity on the counter post listing and low basis costs.
   
• The company has been promoted by Rajan Mote and Mahesh Bhanushali. The promoter holding in the company currently stands at 93.00%. However, post the fresh issue of shares, the promoter equity holding share will get diluted to 67.17%.
   
• The fresh issue funds will be used by the company for meeting the incremental working requirements of the company while a small part will also be allocated for general corporate purposes.
   
• While Fedex Securities Private Ltd will be the lead manager to the issue, Bigshare Services Private Ltd will be the registrar to the issue. The market maker for the issue will be SS Corporate Services Ltd.

IPO allocation and minimum lot size for investment

Out of the total shares on offer, the company has allocated 86,400 shares for the market maker for providing liquidity post listing and reducing basis risk. The net offer (net of market maker allocation) will be distributed between the retail investors and the HNI / NII investors. The table below captures the gist of the IPO allocation to various categories.

The minimum lot size for the IPO investment will be 1,200 shares. Thus, retail investors can invest a minimum of ₹1,18,800 (1,200 x ₹99 per share) in the IPO. That is also the maximum that the retail investors can invest in the IPO. HNI / NII investors can invest a minimum of 2 lots comprising of 2,400 shares and having a minimum lot value of ₹2,37,600. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The table below captures the break-up of lot sizes for different categories.

Key dates to be aware of in the Oneclick Logistics India IPO (SME)

The SME IPO of Oneclick Logistics India IPO opens on Wednesday, September 27th, 2023 and closes on Tuesday, October 03rd, 2023. The Oneclick Logistics India Ltd IPO bid date is from September 27th, 2023 10.00 AM to October 03rd, 2023 5.00 PM. The Cut-off time for UPI Mandate confirmation is 5 PM on the issue closing day; which is October 03rd, 2023.

It must be noted that in ASBA applications, there is no refund concept. The total application amount is blocked under the ASBA (applications supported by blocked amounts) system. Once the allotment is finalized, only the amount is debited to the extent of the allotment made and the lien on the balance amount is automatically released in the bank account.

Financial highlights of Oneclick Logistics India Ltd

The table below captures the key financials of Oneclick Logistics India Ltd for the last 3 completed financial years.

Data Source: Company DRHP filed with SEBI

One thing is that most of the growth on top line has come in the last one year. The company has reported net margins of 3.7% in the current year, but that could be more due to the weak growth in profits in the latest year. Profits have been constant despite sales almost tripling and that should be a concern. The ROE looks to be very high, but then the ROE is bound to be elevated for such low investment industries that are predominantly service driven. The key thing to look at would be the costs and that is where the company is feeling the pressure.

The traditional P/E model becomes difficult to apply in the case of Oneclick Logistics India Ltd as the company has delivered a relatively better performance on revenues only in the latest year. However, even otherwise, the P/E at over 20 is well above the average that this sector gets. Investors will have to recognize the risk and be cautious while investing in this IPO. The risks could outweigh the prospects in the short to medium term.