In a move towards going public, Flipkart-backed logistics startup BlackBuck has filed its draft prospectus with the Indian securities regulator, SEBI. This document outlines their plan to raise Rs 550 crore through an IPO (Initial Public Offering).
BlackBuck’s IPO will consist of two parts. First, they will issue new shares worth Rs 550 crore. Second, existing shareholders will offer 21.6 million shares in an offer for sale (OFS).
Rajesh Yabaji, Chanakya Hridaya, and Rama Subramaniam, the company’s co-founders and promoters, will each offer a portion of their holdings for sale. Yabaji will sell 2.2 million shares, while Hridaya and Subramaniam will each sell 1.1 million shares.
Investors such as Accel, Tiger Global, and Peak XV Partners are all expected to participate in the offer for sale (OFS) by selling a part of their shares in the company.
Accel, the largest shareholder in the firm with a 14% stake, will sell 4.3 million shares and 923,282 shares through its two units in the OFS. Singapore-based Quickroutes International will sell 3.9 million shares, while World Bank-backed International Finance Corporation will sell 1.7 million shares and 628,315 shares through two entities. US-based Sands Capital will sell 1.3 million shares, 514,745 shares and 302,328 shares, respectively, through its three entities participating in the OFS.
Several other venture capital firms besides Accel will also be participating in BlackBuck’s IPO by selling shares through the Offer for Sale (OFS). These include prominent names like Tiger Global Management (selling 883,322 shares), Peak XV Partners (selling 640,409 shares), and B Capital (selling 529,993 shares).
The funds raised through the IPO will be strategically allocated towards two key areas. First, BlackBuck plans to invest Rs 200 crore in sales and marketing initiatives to strengthen its market presence further. Second, they will dedicate Rs 140 crore to their non-banking financial company (NBFC) subsidiary, BlackBuck Finserve, to support its growth.
“The net proceeds invested into the NBFC subsidiary will be utilized by BFPL for financing the augmentation of its capital base to meet its future capital requirements,” said the draft red herring prospectus.
BlackBuck is experiencing significant growth, boasting a user base of 963,345 truck operators as of March 31, 2024. They also saw a notable increase in monthly active users on their BlackBuck app, with 597,638 registered transacting truck operators in 2023-24 compared to 458,025 the year before.
To capitalize on this growth, BlackBuck plans to allocate a portion of the IPO proceeds towards strategic investments. Rs 200 crore will be directed towards sales and marketing efforts, while Rs 75 crore will be invested in product development to enhance their offerings further. Additionally, Rs 140 crore will be dedicated to their NBFC subsidiary, BlackBuck Finserve.
BlackBuck’s financial performance also reflects their growth trajectory. Operating revenue for 2023-24 reached Rs 296 crore, up from Rs 175 crore in the previous year. While they still report a loss from continuing operations (Rs 166 crore in 2023-24 compared to Rs 236 crore the year before), the loss has narrowed.
The IPO will be managed by a consortium of book-running lead managers, including Axis Capital, Morgan Stanley, JM Financial, and IIFL Securities.
