Sunsky Logi BSE SME IPO review

•    The company is engaged in providing integrated logistics solutions for global markets.
•    While it posted growth in its bottom lines, it marked de-growth in top line for FY24.
•    It provides end to end logistics solutions for all modes of transport i.e., Rail, Road, Sea and Air.
•    The company operates in a highly competitive and fragmented segment.
•    Based on its recent financial data, the issue appears greedily priced.
•    There is no harm in skipping this “High Risk/Low Return” pricey and dicey bet.

ABOUT COMPANY:
Sunsky Logistics Ltd. (SLL) is engaged in the business of integrated logistics solutions. It is involved in the management and coordination of the movement of materials or finished goods throughout the supply chain, from the point of origin to the destination. The company provides third party logistics services which is popularly known as “3PL” services. “3PL” services comprise freight forwarding, cargo handling, door-to-door distribution, multi-transport operator, and customs clearance services. It encompasses local transportation at the billing end, freight services and custom clearance to again transportation to enable goods reach the destination.

SLL has developed network of agents in the major export markets who liaise with local customs for clearance and are responsible for the delivery of goods to their respective clients. Simultaneously, it has working relationship with multiple shipping companies with whom it regularly deals in exporting or importing of consignments. This relationship with multiple partners in shipping lines has kept it in good stead in procuring good rates and are able to take order and make deliveries on time. It is a member of World Shipping Alliance (WSA) and Bling Logistics Network Inc (Bling). This network is essentially of forward freight agents, shipping lines and other allied people involved in the forward freight industry. 

Being a member to this network helps to secure agents who can help the company to get the custom clearance at various export destination. Hence, it is able to provide services to all major export destinations like Americas, Africa, Europe and Asian countries. The company is also engaged in the handling of project cargo, which is a specialized activity requiring detailed planning and technical expertise. The comprehensive project handling service includes designing and executing customized solutions tailored to meet specific customer requirements for the transport of specialized equipment, from one location to another using multiple modes of transport, as per the requirement of customer. It is also involved in the management and coordination of the movement of raw materials or finished goods throughout the supply chain, from the point of origin to the destination.

SLL achieved a significant milestone by obtaining the Multimodal Transport Operator (MTO) license on December 7, 2021, vide which the company provides single as well as multimodal transportation services which involves the coordinated use of multiple modes of transportation (such as road, rail, sea, air) within a single, integrated supply chain to optimize efficiency and meet the unique requirements of shipments, right from the shipment planning, route optimization, carrier selection, documentation, containerization, tracking, to communication and coordination, last-mile delivery.

On February 8, 2022, the company obtained a certificate for Ocean Transportation Intermediary (OTI) ocean freight from the Federal Maritime Commission (FMC), through which it strengthened capabilities and enabled it to expand operations and deliveries in the United States of America’s market. During the fiscal year 2025, it has processed services in different countries such as USA, Uganda, UAE, Oman, Guatemala, Australia, and Iraq. Its existing resources give customers complete transparency and control to monitor the progress of their supply chain. The company has a dedicated team of experienced employees and also a network of overseas agents globally who design and manage the entire supply chain. As of July 31, 2025, it has 9 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden IPO of 3660000 equity shares of Rs. 2 at a fixed price of Rs. 46 per share to mobilize Rs. 16.84 cr. IPO opens for subscription on September 30, 2025, and will close on October 03, 2025. The minimum application to be made is for 6000 shares and in multiple of 3000 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 29.43% of post-IPO paid-up equity capital of the company. The company is spending Rs. 1.65 cr. for this IPO process, and from the net proceeds of the issue, the company will utilize Rs. 2.75 cr. for working capital, Rs. 6.42 cr. for capex on flatbed trailers, Rs. 3.50 cr. for repayment/prepayment of certain borrowings, and Rs. 2.52 cr. for general corporate purposes.

The IPO is solely lead managed by Nirbhay Capital Services Pvt. Ltd., while KFin Technologies Ltd. is the registrar to the issue. Rikhav Securities Ltd. is the market maker.

The company has issued initial equity shares at par value, and issued bonus shares in the ratio of 350 for 1 in October 2024. The average cost of acquisition of shares by the promoters is Rs. 0.02, and Rs. 0.06 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 1.76 cr. will stand enhanced to Rs. 2.49 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 57.20 cr. Tiny paid-up equity capital post-IPO indicates longer gestation period for migration.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit, of Rs. 19.38 cr. / Rs. 0.31 cr. (FY23), Rs. 14.81 cr. / Rs. 1.25 cr. (FY24), Rs. 22.27 cr. / Rs. 2.59 cr. (FY25). For 4M of FY26 ended on July 31, 2025, it earned a net profit of Rs. 1.37 cr. on a total income of Rs. 8.45 cr.

For the last three fiscals, the company has reported an average EPS of Rs. 2.01, and an average RoNW of 56.49%. The issue is priced at a P/BV of 6.85 based on its NAV of Rs. 6.72 as of July 31, 2025, and at a P/BV of 2.52 based on its post-IPO NAV of Rs. 18.28 per share.

If we attribute its FY25 super earnings on post-IPO expanded equity base, then the asking price is at a P/E of 13.90, and based on its FY24 earnings, the P/E stands at 22.12. Thus, the issue appears aggressively priced.

The company has posted PAT margins of 1.61% (FY23), 8.45% (FY24), 11.74% (FY25), 16.53% (4M-FY26), and RoCE Margins of 30.67%, 50.65%, 59.34%, 20.94% respectively for the referred periods. 

DIVIDEND POLICY:
The company has not declared 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 Ashapura Logi, as its listed peer. It is currently trading at a P/E of 8.72 (as of September 30, 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 4th mandate from Nirbhay Capital in the last four fiscals. Out of the last 3 listings, 2 opened at discount, and 1 at par, thus the LM has a poor track record.