Blackbuck IPO: Blackbuck’s early backers make up to 5X profit, but late investors lose on weak listing

Even as early investors of trucking aggregator Blackbuck’s parent company Zinka Logistics, Accel, Flipkart and Tiger Global made four to fivefold on their investments from the company’s initial public offering (IPO) – some of the late entrants to the firm’s capitalisation table are sitting on capital losses.

The Bengaluru-based company listed on the exchanges Friday, with its shares commencing trading 2.2% up on the BSE. The shares opened trading at Rs 279.05 on the BSE, compared with the IPO price of Rs 273.

Post its listing, the stock went on a decline, falling around 7% compared to the issue price. On Friday, the scrip closed at Rs 260.20 on the BSE.

Investors in red

Peak XV Partners, which first backed Blackbuck in 2018, sold shares in the IPO through the offer-for-sale (OFS) portion at 12% lower than its acquisition price. The venture capital firm holds a 1.3% stake worth Rs 62 crore in Blackbuck after the IPO.Similarly, the stake held by Silicon Valley-based venture capital investor Tribe Capital, which led Blackbuck’s 2021 round, is 39% lower at the end of the firm’s debut day in public markets.

Blackbuck went public at a valuation of Rs 4,818 crore, down from its last private valuation of Rs 7,500 crore, which was led by Tribe Capital.

However, Blackbuck isn’t the first new-age firm to go public at a valuation lower than its last private value. Electric two-wheeler maker Ola Electric’s IPO happened at a $4 billion valuation, 25% lower than its last private round. Similarly, Go Digit General Insurance also went public at a 25% discount to its last private valuation.

Early investors gain

Accel, Flipkart and Tiger Global, which were among the earliest investors in Blackbuck – having invested in the company in 2015, are sitting on gains despite the valuation being lowered for the IPO and the subsequent fall following the listing.

While Accel has sold a stake worth Rs 117 crore in the IPO’s OFS component, it is sitting on a stake worth Rs 495 crore. Similarly, Flipkart sold shares worth Rs 151 crore and holds a stake worth Rs 416 crore.

Following an IPO, investors cannot offload shares in a company for at least another six months as per the Securities and Exchange Board of India’s (Sebi) lock-in rules.

New York-based Tiger Global, which led Blackbuck’s Series B round in December 2015, has fully exited its position in the company. It sold a stake worth Rs 37.4 crore in the OFS, but had divested Rs 94 crore worth of shares on November 8.

According to the company’s prospectus, Tiger Global sold Blackbuck’s shares worth Rs 94 crore on November 8.

Bumpy road

For Blackbuck, the almost 10-year-old journey has not been without its ups and downs. The company, founded in 2015, had initially taken a full-stack approach to aggregating trucks. However, this model did not take off, and the company eventually transitioned to a more asset-light model connecting fleet operators with customers.

Blackbuck competed with Warburg Pincus-backed Rivigo, which was acquired by the Mahindra group in 2022.

The company has turned itself around operationally. For the three months ended June 30, 2024, Blackbuck reported operating revenue of Rs 92 crore, up 56% on-year, while posting an Ebitda profit of Rs 14.5 crore against negative Ebitda of Rs 26 crore in the same period last year.

Speaking at the listing ceremony, Blackbuck founder Rajesh Yabaji said, “Trucking is a sector which is not a bed of roses. We have been able to get through. At this milestone where you go public, the responsibility to really make a difference goes up 10x.”

The IPO was subscribed over 1.86 times by the end of its book-building process on November 18, receiving bids for more than 41.9 million shares against the 22.5 million shares on offer, according to data from the BSE.

The IPO consisted of a fresh issue of shares worth Rs 550 crore and an OFS of up to Rs 565 crore.