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03 August 2023

Zeal Global Services Limited IPO: Offering Logistics Solutions in Air Cargo Industry

Introduction:

Zeal Global Services Limited, a Delhi-based business founded in 2014, provides logistics services to the air cargo industry.. It operates as a General Sales and Service Agent (GSSA)as a regional airline's sales partner. To a variety of industries, including fashion, pharmaceuticals, automotive, and industrials, the company offers passenger and freight carrier services.

Business Verticals:

Zeal Global Services offers its services in two main verticals:

1. Cargo Carrier Service
2. Passenger Carrier Service

Support Services:

In addition to its carrier services, Zeal Global Services also provides support services to its customers, including sales, marketing, administration, and operations.

Zeal Global Services IPO Details:

The Zeal Global Services IPO is a Fixed Price Issue with a total issue size of Rs 36.46 Crores. The IPO price is ₹103 per share, and it will be listed on NSE SME. The IPO opened on Jul 28, 2023, and closed on Aug 1, 2023.

IPO Details at a Glance:

IPO Open Date	Jul 28, 2023
IPO Close Date	Aug 1, 2023
Face Value	₹10 per share
Price	₹103 per share
Lot Size	1200 Shares
Total Issue Size	3,540,000 shares (aggregating up to ₹36.46 Cr)
New Shares	3,540,000 shares (Up to 36.46 crores)
Issue Type	Fixed Price Issue IPO
Listing At	NSE SME

Promoter Holding:

The promoters of Zeal Global Services Limited are Mr. Nipun Anand and Mr. Vishal Sharma. Pre-issue shareholding is 100.00%, which will be reduced to 73.40% post the IPO.

Financial Performance:

Financial Information (Restated)

Period Ended	31-Jan-2023
Total Assets	₹4,969.26 Lakhs
Total Revenue	₹9,505.38 Lakhs
Profit After Tax	₹826.65 Lakhs
Net Worth	₹2,115.61 Lakhs
Reserves and Surplus	₹1,920.21 Lakhs
Total Borrowing	₹1,243.92 Lakhs

Key Performance Indicators:

P/E (x)	13.83
Market Cap (₹ Cr.)	₹137.09
ROE	39.07%
ROCE	0.56
Debt/Equity	0.59
EPS (Rs)	8.46
RoNW	48.73%

Use of Proceeds:

The company intends to utilize the IPO proceeds for various purposes, including working capital requirements, investments in subsidiaries for business expansion, part repayment of debt, general corporate purposes, and meeting issue expenses.

Zeal Global Services IPO Review:

[Dilip Davda] The company is operating in a competitive segment with no entry barriers. It has shown impressive earnings in the last 22 months to justify the IPO's pricing. However, the margins posted by the company are not convincing. Long-term investors with surplus funds may consider investing, while others may prefer to avoid it.

IPO Subscription Status (as of Aug 1, 2023):

The Zeal Global Services IPO is subscribed 2.06 times, with the retail category oversubscribed 2.42 times, the QIB category [.] times, and the NII category 1.70 times.

Conclusion:

Zeal Global Services Limited offers logistics solutions in the Air Cargo Industry and operates as a GSSA and sales partner for airlines. The company's IPO is subscribed moderately, and investors should carefully consider its financial performance and business prospects before making investment decisions.