Jet Freight Logi NSE SME IPO review (Apply)

Jet Freight Logistics Ltd (JFLL) is engaged in logistics business having branches located in various cities in India. Company is registered with International air transport association (IATA) agent for Air cargo. JFLL is providing services for Perishable cargo, Time sensitive cargo and also provide Shipment of Hazardous cargo, ODC consignments, pharmaceutical cargo, temperature controlled and general cargo. Its main segment is transport of perishable cargo which includes handling frozen and chilled meat, seafood, vegetables, fruits, cut flowers and pharmaceutical products.

The company has tie ups with various airlines in the world in order to provide tailor made solutions based on customer needs. It offers the best rates along with the best airline options. JFLL has also tied up with various agents across the world who provide services of making the goods reach from international Airport to the respective destinations depending upon the client needs. The company as a freight forwarder take full responsibilities of shipment from the point of receipt to the point of destination .Pricing is based on nature of goods, location, type of service and facility given to the customer. However sector at which the goods are been sent plays a very crucial role in deciding the price of the goods.

To meet its working capital requirements and listing gains, the company is coming out with a maiden IPO of 1452000 equity share of Rs. 10 each at a fixed price of Rs. 28 per share to mobilize Rs. 4.07 crore. Issue has already opened for subscription on 24.11.16 and will close on 28.11.16. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Issue is solely managed by Sarthi Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. After issuing equity at par in initial period, it issued further equity at a price of Rs. 12.50 per share in 2012. Post IPO, its current paid up equity capital of Rs. 4 crore will stand enhanced to Rs. 5.45 crore. Shares will be listed on NSE SME Emerge platform post allotments.

On performance front, for last three fiscals, it has posted turnover /net profits of Rs. 118.77 cr. / Rs. 0.53 cr. (FY14), Rs. 145.44 cr. / Rs. 0.73 cr. (FY15) and Rs. 206.67 cr. / Rs. 0.96 cr. (FY16). For first quarter of current fiscal, it has earned net profit of Rs. 0.25 crore on a turnover of Rs. 58.66 crore. If we annualize this and attribute on the fully diluted equity post IPO then asking price is at a P/E of 15 plus. As stated in prospectus, the company has no listed peer to compare with.

On merchant banker’s front, this is 21st mandate from its stable and earlier mandates have shown mixed trends on listing days.

Conclusion: Cash surplus investors may park funds for long term.