Neptune Logi BSE SME IPO review (Not Rated)

•    The company is engaged in providing all services related to logistics solutions on Pan-India basis.
•    It primarily operates on its own fleet and has in-house repairs and maintenance department for its trucks and fleets. 
•    The company posted inconsistency in its top and bottom lines for the reported periods.
•    The quantum jump in its bottom lines from FY25 onwards raises eyebrows and concern over its sustainability as it is operating in a highly competitive and fragmented segment.
•    There is no harm in skipping this aggressively priced offer.

ABOUT COMPANY:
Neptune Logitek Ltd. (NLL) with over 13 (Thirteen) years of operational experience since inception, provides differentiated logistics solutions with its: (a) pan-India presence, (b) integrated service offerings, (c) focus on improving service through door-to-door services, and (d) large network of vehicle fleet.

Being an integrated logistics company in India, the Company primarily operates in the segments like: (i) Freight Forwarding and Custom Clearance including Import and Export; (ii) Air Freight Transportation (including Import and Export and Courier Services; (iii) Door to Door Multimodal Coastal Forwarding (iv) Road Transportation and (v) Rail Transportation. As on the date of this Prospectus, it had a pan-India presence through a network of head office and 9 (Nine) branch offices, strategically located to support its operations. Out of these, one branch is specifically dedicated to the repair and maintenance of its trucks and fleet, which enables the company to ensure vehicle readiness, reduce downtime, and maintain service quality across its logistics chain.

It operates on an asset-based business model, which allows it to deliver high-quality services to customers. The essential assets, including commercial vehicles, are either owned by it or provided through a network of business partners on a lease basis. As a result, it maintains own fleet of vehicles while also collaborating with its business partners to hire additional vehicles as needed to support its logistics operations, the company also operates a captive petrol pump with storage capacity of 60 kilolitres, for which it holds a valid Class B license from the Petroleum and Explosives Safety Organisation (PESO). This in-house facility helps it better manage fuel usage and optimize operational costs.

Its operations are further strengthened by the use of cutting-edge digital tools and proprietary software, allowing it to offer agile, efficient, and transparent logistics solutions. Key technological features include GPS-enabled fleet management systems, real-time vehicle tracking, and an auto on/off feature for engine monitoring and control. These technologies enhance safety, reduce idle time, and ensure better utilization of fleet resources. Additionally, the company utilizes predictive analytics to anticipate demand fluctuations and optimize route planning, along with automated workflows that support data-driven decision-making.

The company has increased its fleets and fleet operators, the number of fleets owned as of financial year ending on August 31 2025, March 31, 2025, 2024 and 2023 is 192, 199, 217 and 159 respectively. With a fleet of over 190 trailers operating in and around various states such as Gujarat, Kerala, Tamilnadu, and Karnataka, Neptune Logitek is well-equipped to meet diverse logistics needs. As of August 31, 2025, it had 96 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden IPO of 3700000 equity shares at a fixed price of Rs. 126 per share to mobilize Rs. 46.62 cr. The IPO opens for subscription on December 15, 2025, and will close on December 17, 2025. The minimum application to be made is for 2000 shares and in multiple of 1000 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 27.00% of post-IPO paid-up equity capital of the company. The company is spending Rs. 4.65 cr. for this IPO process, and from the net proceeds of the issue, the company will utilize Rs. 33.94 cr. for capex on purchase of trucks and ancillary equipment, Rs. 2.00 cr. for repayment of loan, Rs. 6.03 cr. for general corporate purpose.

The IPO is solely lead managed by Galactico Corporate Services Ltd., while Bigshare Services Pvt. Ltd. is the registrar to the issue. Asnani Stock Broker Pvt. Ltd., is the market maker. The issue is underwritten to the tune of 15% by Galactico Corporate and 85% by Asnani Stock Broker.

After issuing/converting entire initial equity shares at par value, it has issued bonus equity shares in the ratio of 9 for 1 in October 2024. The average cost of acquisition of shares by the promoters is Rs. 1.00 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 10.00 cr. will stand enhanced to Rs. 13.70 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 172.62 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total revenue/net profit/ - (loss), of Rs. 187.71 cr. / Rs. – (0.18) cr. (FY23), Rs. 175.76 cr. / Rs. 0.001 cr. (FY24), Rs.  260.74 cr. Rs. 9.16 cr. (FY25). For 5M- FY26 ended on August 31, 2025, it earned a net profit of Rs. 4.02 cr. on a total revenue of Rs. 105.52 cr. The quantum jumps in net profits from FY25 onwards (i.e., pre-IPO period) raises eyebrows and concern over its sustainability going forward, as it is operating in a highly competitive and fragmented segment.

For the last three fiscals, the company has reported an average EPS of Rs. 6.59, and an average RoNW of 29.70%. The issue is priced at a P/BV of 5.26 based on its NAV of Rs. 23.97 as of August 31, 2025, but its post-IPO NAV data is missing from the offer document. Its net debt to EBITDA ratio of 6.06 and debt equity ratio of 2.35 as of August 31, 2025, raises alarm.

If we attribute its FY26 super annualized earnings on post-IPO expanded equity base, then the asking price is at a P/E of 17.90, and based on its FY25 earnings, the P/E stands at 18.86. Thus, the issue appears aggressively priced, and needs caution as the margins reported are not sustainable in long term.

The company has posted PAT margins of – (0.10) % (FY23), --% (FY24), 3.56% (FY25), 3.83% (5M-FY26), and RoCE Margins of 4.17%, 5.30%, 21.25%, 21.59%, respectively for the referred periods. 

DIVIDEND POLICY:
The company not paid any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performances and future prospects. 

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown S J Logistics, Tejas Cargo, Tiger Logistics, as its listed peers. They are currently trading at a P/E of 8.86, 26.4, and 14.0 (as of December 11, 2025, 2025). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORDS:
This is the 2nd mandate from Galactico Corporate in the last two fiscals. The listing took place so far for 2mandates since FY21 and both have opened in discount. Thus, the lead manager has a poor track record.