Premier Roadlines Limited IPO Review
Premier Roadlines Limited is a distinguished name in the logistics and transportation industry in India, with a rich history and a robust presence across the nation. This detailed profile explores the company's origins, its founding family, and the motivations behind its inception, providing a clear picture of its journey and current standing.
Promoter Family
The company's legacy began with the vision of its founder, Late Shri Nand Ram Gupta Ji, a visionary in the transportation sector. His entrepreneurial spirit and dedication laid the foundation for Premier Roadlines Limited. The baton of leadership was passed on to his son, Mr. Virender Gupta, who now serves as the Chairman and has been instrumental in scaling the company to new heights over the past two decades. The third generation, represented by Mr. Samin Gupta, continues to infuse the company with youthful vigor and innovative approaches, ensuring that the family's legacy thrives in the modern era.
City of Origin
Premier Roadlines Limited proudly started its operations in the bustling city of Delhi, the capital of India. The city's strategic location and its status as a commercial hub have played a significant role in the company's expansion and success.
Business Inception
The company was officially incorporated on March 19, 2008, marking the beginning of a new chapter in the logistics and transportation domain. The decision to embark on this venture was driven by the need to offer comprehensive logistics solutions, particularly focusing on land transportation of goods ranging from 1 metric tonne (MT) to 250 MT.
Purpose and Vision
The inception of Premier Roadlines Limited was motivated by the goal to provide exceptional logistics services that ensure customer satisfaction. The company's mission is to become a key player in the road transport industry, delivering quality and service to core sectors through innovation and sustainable development. With a vision to be India's preferred logistics service provider, Premier Roadlines Limited aims to offer a one-point solution for all surface transportation requirements on a pan-India level.
Today, Premier Roadlines Limited stands as a testament to the enduring values of integrity, transparency, and accountability. It boasts a vast network of branches, a diverse fleet, and a dedicated team, all working in harmony to serve excellence and maintain the company's status as a leader in the logistics sector.
Competitive Strengths
Premier Roadlines Limited, established in 2008, has carved a niche for itself in the logistics and transportation industry in India. With a focus on land transportation of goods ranging from 1 MT to 250 MT, the company has demonstrated a robust competitive edge in several key areas. This detailed analysis aims to shed light on the competitive strengths that set Premier Roadlines apart in a challenging market.
Revenue, Sales, and Profit
Premier Roadlines Limited, a company specializing in surface transportation and logistics, has shown significant financial growth in the recent fiscal year. For the financial year ending on March 31, 2022, the company reported a revenue range between INR 100 crore to 500 crore. The net worth of Premier Roadlines Limited witnessed an increase of 23.95%, while EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) surged by 80.23%. The total assets of the company grew by 12.27%, indicating a solid expansion in the company's asset base. Moreover, the liabilities decreased by 2.54%, reflecting a stronger financial position. The company's debt-to-equity ratio stood at 1.21, with a return on equity of 19.33%, showcasing a robust return for the shareholders. The financial performance of Premier Roadlines Limited also includes a notable increase in trade receivables by 20.03% and trade payables by 58.27%, which may indicate a growth in business operations and credit terms extended by suppliers. The current ratio, an indicator of the company's ability to pay short-term obligations, was at a healthy 1.73. These financial metrics demonstrate the company's profitability and operational efficiency, contributing to its overall financial health.
Distribution Network and Geographical Reach
Premier Roadlines Limited (PRL) is a logistics service provider with a rich legacy spanning four decades, offering comprehensive solutions for land transportation of goods across India. With a focus on transporting dry cargo ranging from 1 MT to 250 MT, PRL has developed a robust distribution network that caters to a diverse range of sectors, including heavy engineering, renewable energy, construction equipment, infrastructure, EPC contractors, oil & gas, and power. The company's geographical reach extends throughout the country, supported by a strategically located branch network of over 37 wholly-owned offices, ensuring efficient and reliable service delivery. PRL's commitment to customer satisfaction is evident in their customized solutions, financial soundness, and a customer-centric approach, backed by the latest IT infrastructure. This extensive network and tailored services underscore PRL's vision to be India's preferred logistics service provider for surface transportation requirements on a pan-India level.
Unique Features
The company prides itself on its extensive experience in transporting a wide range of dry cargo, from 1 mt to 250 mt, across the diverse terrains of India. PRL's commitment to customer satisfaction is evident through its customized solutions and customer-centric approach, ensuring that each consignment is handled with utmost professionalism. With a robust owned branch network and the latest IT infrastructure, PRL has established itself as a financially sound entity, capable of delivering quality service to core sectors. The company's services cater to various industries, including heavy engineering, renewable energy, construction equipment, infrastructure, EPC contractors, oil & gas, and power sectors. PRL's expertise also extends to project transportation, over-dimensional cargo, integrated logistics services, fleet rentals, and navigating challenging hilly terrains and remote areas. Their dedication to integrity, transparency, and accountability has earned them recognition and trust within the logistics industry.
Investment in Research and Development
Premier Roadlines Limited, established in 2008, has been a significant player in the logistics sector, offering a range of services including general transportation, project logistics, and oversized cargo transportation across India. While specific details on the company's investment in research and development are not publicly disclosed, it is evident that the company is focused on growth and expansion. The recent initial public offering (IPO) of Premier Roadlines Limited aimed to raise ₹40.36 crores, with the intention to utilize these funds for various purposes including the repayment of certain borrowings, purchasing vehicles for commercial purposes, and meeting working capital requirements. This strategic move indicates a commitment to enhancing their service capabilities and potentially investing in the development of more efficient and innovative logistics solutions. The company's financials reflect a positive trajectory, with a revenue of ₹3,381.55 lakhs and a net profit of ₹256.66 lakhs for the period ending December 31, 2023, suggesting a healthy financial position to support its developmental endeavors.
Premier Roadlines Limited IPO Details
Issue Date: The Issue Date in an Initial Public Offering (IPO) refers to the specific day when a company's shares are first made available for public purchase on the stock market. This date is a critical milestone in the IPO process, marking the transition of a company from private to public status and allowing investors to buy shares directly from the company for the first time. (Issue Date: May 10, 2024 to May 14, 2024).
Listing Date: The listing date refers to the day when the company's shares are officially listed and begin trading on a stock exchange. This is typically several business days (3-6 days) after the issue date after processes like share allotment and finalization are completed. On this date, investors who were allotted shares during the IPO can begin selling them, and new investors can start purchasing them on the exchange at the prevailing market price. (Listing Date: Friday, May 17, 2024).
Face Value of Shares: The face value of shares in an Initial Public Offering (IPO) refers to the original cost of the shares as determined by the company going public. It represents the nominal value and is often set at a lower figure, such as Rs. 10 or Rs. 100, which remains constant irrespective of the market price of the share after the company is listed on the stock exchange. When a company launches an IPO, the shares are typically offered at a price that includes this face value plus an additional premium, which reflects the current market valuation of the company. The premium over the face value is determined by the company's financial performance and future growth prospects as assessed by the investment bankers managing the IPO. (Face Value: ₹10 per share).
Price Band: A price band of an IPO is the range of prices within which the investors can bid for the shares of a company that is going public. The price band is set by the issuer and the lead managers of the IPO, based on various factors such as the demand and supply of the shares, the financial performance and valuation of the company, and the market conditions. (IPO Price: ₹63-₹67 per share).
Lot Size: In the context of an Initial Public Offering (IPO), the term "lot size" refers to a fixed number of shares that the issuing company sets as the minimum quantity that investors can apply for. This lot size is predetermined before the IPO and is mentioned in the application forms. The lot size varies from one company to another and is an important factor for investors to consider when applying for an IPO. (Lot Size: 2000 Shares).
Total Issue Size: The total issue size represents the total number of shares the company is offering to raise capital through the IPO. This number is determined by the company and its advisors, considering factors like their funding needs and the expected investor demand. The total issue size is then divided by the lot size to determine the total number of lots available for purchase by investors. (Total Issue Size: 6,024,000 shares (aggregating up to ₹40.36 Cr)).
Fresh Issue: A Fresh Issue in the context of an Initial Public Offering (IPO) refers to the creation and sale of new shares by a company to the public. Unlike an Offer for Sale, where existing shareholders sell their shares, a Fresh Issue results in the generation of new capital for the company. This capital is typically used for growth initiatives such as expansion, research and development, or debt repayment. (Fresh Issue: 6,024,000 shares (aggregating up to ₹40.36 Cr)).
Issue Type: The type of an IPO can vary depending on the market and regulatory conditions. Some of the common types of IPOs are, Fixed priced IPO, Auction IPO, Book Building IPO, and Hybrid IPO. (Issue Type: Book Build Issue IPO).
Listing At: An integral part of the IPO process is the listing. This refers to the day the company's shares officially begin trading on a stock exchange, such as the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE) in India. Once listed, anyone with a brokerage account can buy and sell the company's shares on the exchange. (Listing at: NSE SME).
Retail Shares Offered: Retail shares offered in an IPO refer to the portion of shares that are specifically allocated for individual investors, as opposed to institutional investors. These shares are part of the public offering where companies going public aim to raise capital by selling shares. Retail investors are typically allocated a certain percentage of the total shares available for the IPO. The allotment process for retail investors is designed to be fair and transparent, ensuring that all investors have an equal chance of receiving shares based on their application and market conditions. (Retail Shares Offered: Not less than 35.00% of the Offer).
QIB Shares Offered: QIBs are institutional investors such as banks, mutual funds, insurance companies, pension funds, etc., who have the expertise and financial resources to invest in the securities market. They are considered as informed and sophisticated investors who can assess the risks and returns of an IPO. QIBs can bid for up to 50% of the total shares offered in an IPO via the profitability route, or up to 75% of the total shares offered in an IPO via the QIB route. QIBs have to pay only 10% of the bid amount at the time of application, and the rest after the finalization of the basis of allotment. (QIB Shares Offered: Not less than 50.00% of the Offer).
NII (HNI) Shares Offered: NII stands for Non-Institutional Investors, which includes High Net-worth Individuals (HNIs) who bid for shares worth more than ₹200,000. The NII category is reserved for investors who do not fall under the retail or Qualified Institutional Buyers (QIBs) categories. Typically, a certain percentage of the IPO, usually around 15%, is allocated for NIIs to ensure a wider distribution of shares. HNIs within the NII category often have a higher chance of allotment compared to retail investors, making it an attractive option for those looking to invest larger sums in an IPO. (NII (HNI) Shares Offered: Not less than 15.00% of the Offer).
Competitors of Premier Roadlines Limited
The logistics sector in India is highly competitive, with several players vying for market share. Premier Roadlines Limited faces competition from a variety of companies that offer similar logistics solutions. Some of the notable competitors include:
1. KEC International Limited: A global infrastructure engineering, procurement, and construction (EPC) major, it is known for its extensive experience in power transmission and distribution, cables, railways, and civil space.
2. ThyssenKrupp Industrial Solutions (India) Private Limited: This company provides a full range of engineering services including design, procurement, and construction services for industrial plants and systems.
3. Tata Project Limited: Part of the prestigious Tata Group, it provides turnkey solutions for the construction of roads, bridges, fully integrated rail & metro systems, commercial buildings, and airports.
4. G R Infraprojects Ltd: An integrated road EPC company with experience in design and construction of various road/highway projects across India.
5. Tata Power Solar Systems Limited: As India's largest integrated solar company, it brings expertise in solar manufacturing and EPC services.
6. Sterlite Power Transmission Limited: A leading private sector power transmission company, it focuses on building power transmission infrastructure with projects across India.
Apart from these, Premier Roadlines also contends with international logistics giants such as Landstar and XPO Logistics, which have a significant presence and offer a range of services that compete with those of Premier Roadlines.
The competitive landscape for Premier Roadlines is both challenging and dynamic, with each competitor bringing its own strengths and specialties to the table. The company's ability to maintain a competitive edge relies on its operational efficiency, customer service, and the continual upgrading of its fleet and technology.
Conclusion
In conclusion, the Premier Roadlines Limited IPO presents a significant opportunity for investors seeking to participate in the growth of a robust logistics solutions provider. With a fresh issue size of ₹40.36 crores and a price band of ₹63 to ₹67 per share, the company aims to strengthen its financial position and expand its services. The IPO, which is set to list on the NSE SME platform, reflects the company's commitment to enhancing its transportation network and supporting its working capital requirements. Investors are advised to consider the company's performance, market strategies, and the potential risks involved before making an investment decision. The success of this IPO could be a testament to Premier Roadlines' operational efficiency and its ability to meet the logistics demands of a diverse clientele. As the IPO window closes on May 14, 2024, it marks a pivotal moment for the company and its stakeholders.
Read the Detailed Review Here.
Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing securities, that suit your needs. The performance and returns of any equity stock can neither be predicted nor guaranteed.
FAQs
Q: What is an IPO?
An Initial Public Offering (IPO) is a process through which a privately held company offers its shares to the public for the first time and becomes a publicly traded company.
Q: How can I apply for an IPO?
You can apply for an IPO through various methods:
ASBA (Application Supported by Blocked Amount): In this method, your application money remains in your bank account until the basis of allotment is finalized.
UPI (Unified Payment Interface): You can authorize the blocking of funds in your bank account using UPI while applying for an IPO.
Q: What is ASBA?
ASBA stands for Application Supported by Blocked Amount. It allows your application money to be blocked in your bank account during the IPO bidding process. You continue to receive interest on the blocked amount.
Q: What is the difference between book building and a normal public issue?
Book building is a process where demand for securities is elicited and the price is assessed based on investor bids. In a normal public issue, the price is fixed by the issuer.
Q: Can I make payments through UPI for IPOs?
Yes, you can use UPI as a payment method for IPOs. The UPI platform blocks the funds for IPO applications after you approve the fund block mandate request.
Q: What is the minimum order quantity for an IPO?
The minimum number of shares you can apply for in an IPO is known as the minimum order quantity. It varies for each IPO.
Q: What is the cut-off price in an IPO?
The cut-off price is the price at which you bid for shares without specifying a particular price. It allows you to participate in the IPO without specifying a specific bid price.
Q: Can I revise my bids during the IPO process?
Yes, you can revise your bids multiple times before the IPO bidding period ends.
Q: Which banks offer the ASBA facility for IPOs?
Several banks, known as Self Certified Syndicate Banks (SCSBs), offer the ASBA facility. Some examples include HDFC Bank, ICICI Bank, Axis Bank, and SBI.
Q: How do I find IPO mandates on UPI apps?
You can check the list of UPI handles supported for IPO payments on the National Payments Corporation of India (NPCI) website. These handles allow you to apply for IPOs using UPI.