Zinka Logistics Solutions Ltd

We are India`s largest digital platform for truck operators.

We have strong network effects of platform resulting in robust customer retention rates and higher monetization.

We have a repeatable playbook of creating and launching new offerings.

We have an omnichannel distribution network with robust sales and service strategy driving customer adoption.

We have a scalable and reliable in-house technology integrating with multiple stakeholders.

We have high growth business with operating leverage and strong unit economics.

We are a Promoter-led management team and have an experienced board.

Some of its Investors have transferred 266,644 Equity Shares to Rajesh Kumar Naidu Yabaji, one of the company Promoters in the month of October 2024 as a gift/Rs.1 per Equity Share. These transfers did not involve any quid pro quo arrangements and were not contingent on the Company achieving certain business / financial milestone or listing of Equity Shares on the Stock Exchanges. There was no agreement subsisting prior to the DRHP to effect these transfers and accordingly were not disclosed in the DRHP. The said transfers will result in a gain of Rs.[*] million at the upper end of the price band to Rajesh Kumar Naidu Yabaji.

The Company and its Subsidiary, TZF Logistics Solutions Private Limited have incurred losses and witnessed negative operating cash flows in the past. Further, its Subsidiary, BlackBuck Finserve Private Limited, has witnessed negative operating cash flows in the past three financial years.

The company depends on its business partners in its payments and vehicle financing offerings. The company partners in its payments offering contribute to a significant portion of its revenues (41.04% and 42.50% of total revenue from continuing operations in the three months ended June 30, 2024 and Fiscal 2024, respectively) and one of its FASTag Partner Banks contributed to 29.62% and 33.51% of total revenue from continuing operations in the three months ended June 30, 2024 and Fiscal 2024, respectively. The loss of any such partners may adversely affect its business, results of operations and financial condition.

Its revenues are significantly dependent on the company payments and telematics offerings, which contributed 92.79% and 94.53% to its total revenue from continuing operations in the three months ended June 30, 2024 and Fiscal 2024, respectively. Any negative impact on these offerings could materially affect its business, results of operations and financial condition.

The company depends on certain key suppliers to procure a significant portion of its vehicle tracking solutions. The company does not enter into long-term agreements with these suppliers and any denial of supplies or loss of the relationship with these suppliers or any supply chain disruption could adversely affect its business, results of operations and financial condition.

The company is India`s largest digital platform for truck operators (in terms of number of users) in Fiscal 2024, which comprises 27.52% of India`s truck operators (Source: Redseer Report). An inability to attract new truck operators or retain its existing truck operators could materially and adversely affect its business, results of operations and financial condition.

The company derives a significant portion of its revenues through commission income (41.09% and 42.86% of total revenue from continuing operations in the three months ended June 30, 2024 and Fiscal 2024, respectively) and subscription fees (38.37% and 39.70% of total revenue from continuing operations in the three months ended June 30, 2024 and Fiscal 2024, respectively). Any fluctuation or negative trend in its commission income and/or subscription fees could materially affect its business, results of operations and financial condition.

The company has in the past failed to file certain forms with RBI for certain allotments made by the Company, within the prescribed timelines and have compounded such delays under FEMA, 1999 and the rules made thereunder and paid the compounding fee. The company has also paid late submission fees for delays in filing of forms with RBI in respect of certain allotments made by the Company and direct investments made by the Company in its Subsidiaries.

The company intend to utilize a part of the Net Proceeds towards investment in Blackbuck Finserve Private Limited, its NBFC subsidiary, which does not have an established operating history, for financing the augmentation of its capital base to meet its future capital requirements.

The company avail certain services of third-party service providers for its platform to implement the company sales and service strategy, and any disruption of or interference with its use of such service could adversely affect its business, results of operations and financial condition.

Its business operations are subject to various laws and regulations which are constantly evolving. If the company, or any such business arrangements with counterparties, are deemed to be not in compliance with any of these laws and regulations, its business, results of operations and financial condition may be materially and adversely affected.

The company enter into non-exclusive agreements with its business partners and certain of these agreements may be terminated by its partners without cause. Any early termination or non-renewal of such agreements may adversely affect its business, results of operations and financial condition.

Its business requires significant sales and marketing initiatives contributing to an increase in its operating expenses, which may adversely impact the company`s business, results of operations and financial condition.

Certain sections of this Red Herring Prospectus disclose information from the Redseer Report which has been prepared exclusively for the Offer and commissioned and paid for by it exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

Its product development efforts may not be successful or yield the returns or benefits that the company expect, and its may not be able to successfully offer the company`s customers new solutions and maintain its competitiveness.

Changes in its subscription or pricing models could adversely affect the company`s business, results of operations and financial condition. Further, loss of customers including due to customers switching over to its competitors could reduce the company subscription fees which may negatively impact its business, revenue from operations and financial condition.

Fluctuations in the road transportation industry and fuel prices may impact freight volumes and truck capacity, which in turn could adversely affect its business, results of operations and financial condition.

The company is required to comply with data privacy regulations and information technology regulations and any noncompliance in the future may have an adverse impact on business, results of operations and financial condition.

Its may not be able to adequately protect or continue to use the company`s intellectual property, which could adversely affect its business, results of operations and financial condition.

The company relies on its BlackBuck App and other telecommunications and information technology systems, networks and infrastructure to operate its business and any interruption or breakdown in such systems, networks or infrastructure or its technical systems could impact the company`s ability to effectively operate its platform or provide its products and services.

The company`s inability to collect receivables in time or at all and default in payment from its customers could result in the reduction of the company`s profits and affect its cash flows.

Its Directors also hold directorships in the company`s Subsidiaries which are engaged in businesses similar to the line of business of the Company.

The Company has not filed certain statutory filings with the MCA in respect of one of its previous Directors in the past. The company cannot assure you that no legal proceedings or regulatory actions will be initiated against the Company in the future.

There have been certain instances of delays in payment of statutory dues by the Company in the past. Any delay in payment of statutory dues by the Company in future, may result in the imposition of penalties and in turn may have an adverse effect on the Company`s business, financial condition, results of operation and cash flows.

Audit reports on its standalone financial statements include certain observations in the annexure to the report prescribed under the Companies (Auditor`s Report) Order, 2020 for Fiscals 2024, 2023 and 2022.

One of the Promoters and Executive Director and Head - New Initiatives is associated as a director and shareholder of one of its Shareholders, Miebach Consulting India Private Limited ("MCIPL"), with may result in a conflict of interest with it.

The company relies on Android operating systems as well as operating systems fitted in vehicles to make its services and app available to customers.

The company has faced high attrition among its employees in the past (37.32% and 41.08% in the three months ended June 30, 2024 and Fiscal 2024, respectively). Its continued success is dependent on the company`s employees, key management personnel and senior management personnel and its inability to attract and retain employees, key management personnel or the loss of services of its senior management personnel in the future may have an adverse effect on its business, results of operations and financial condition.

Its vehicle financing offering exposes it to various risks including in relation to high-risk borrowers and collateral recovery which could adversely affect its business, results of operations and financial condition.

The company has limited experience in its vehicle financing offering, which makes it difficult to accurately assess the risks and challenges in the industry which may negatively impact its business, results of operations and financial condition.

There are outstanding legal proceedings involving the Company, Promoters and Directors. An adverse outcome in any of these proceedings may affect its reputation and standing and impact the company`s future business and could have a material adverse effect on its business, results of operations and financial condition.

The company has obtained debt financing and are required to comply with certain restrictive covenants under its financing agreements. Any non-compliance under such agreements may adversely affect its business, results of operations and financial condition.

Its insurance coverage may not be sufficient or may not adequately protect it against risks and unexpected events, which may adversely affect its business, results of operations and financial condition.

The Company has in the past undertaken a bonus issue which may impact the ability of the Company to declare dividends or undertake bonus issuances in the future.

The audit reports on its special purpose audited consolidated financial statements as of and for the periods ended June 30, 2024 and June 30, 2023 include certain emphasis of matters.

The Company had received a summons to appear as a witness in a proceeding before the State of Punjab had initiated proceedings under the Narcotic Drugs and Psychotropic Substances Act against a user of the Company`s platform. The District and Sessions Courts may pass adverse adjudication orders against it which may adversely impact its business, our financial condition and the company reputation.

The company has in this Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to its operations and financial performance that may vary from any standard methodology that is applicable across the industry the company operates.

Its business is subject to seasonality, which may contribute to fluctuations in its results of operations and financial condition.

The company faces competitive pressures in its business and its inability to compete effectively would be detrimental to its business, results of operations and financial condition.

Certain CCPS which were converted to Equity Shares of face value of Re. 1 each in terms of the SEBI ICDR Regulations are held by certain Shareholders of the Company, in physical form as their demat accounts have not been opened.

Internal or external fraud or misconduct could adversely affect its reputation, business, results of operations and financial condition.

Its Promoters, i.e., Rajesh Kumar Naidu Yabaji, Chanakya Hridaya, and Ramasubramanian Balasubramaniam have limited experience in which its business is operating.

The Unaudited Pro Forma Financial Information included in this Red Herring Prospectus is presented for illustrative purposes only and may not accurately reflect its future financial condition, financial position and results of operations.

Its business requires it to obtain and renew certain licenses and permits from government, regulatory and statutory authorities and the failures to obtain or renew them in a timely manner may adversely affect its business, results of operations and financial condition.

Its online app marketing may constitute internet advertisement, which subjects it to laws, rules and regulations applicable to advertising.

The company has not entered into any definitive arrangements to utilize certain portions of the Net Proceeds of the Offer. Its funding requirements and deployment of the Net Proceeds of the Offer are based on management estimates and have not been independently appraised.

The Company will not receive any proceeds from the Offer for Sale portion. The Selling Shareholders will receive the net proceeds from the Offer for Sale portion.

Its Registered and Corporate Office and all branch offices are situated on lands/in buildings that are not owned by it. In the event that the company lose such rights or are required to renegotiate arrangements for such rights, its business, results of operations and financial condition may be affected.

Its related party transactions may increase in the future and the company cannot assure you that these would be entered into on favorable terms, which may adversely affect its business, results of operations and financial condition.

Any downgrade of its credit ratings may restrict the company access to capital and thereby adversely affect its business, results of operations and financial condition.

The grant of options in future under any employee stock option schemes by the Company will result in a charge to its profit and loss account and may adversely impact the company net income.

Its cannot assure payment of dividends on the Equity Shares in the future and the company`s ability to pay dividends in the future will depends on its earnings, financial condition, cash flows, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements and the company may not be able to pay dividends in future.

Its Promoters will continue to retain significant shareholding in the Company after the Offer, which will allow them to exercise significant influence over it.