Brace Port Logistics IPO Listed at 90% Premium Over Issue Price

The logistics services company Brace Port Logistics Ltd achieved a significant milestone with its stock market debut, as its shares were listed at a premium of 90% over the initial public offering (IPO) price. According to data from the exchange, Brace Port shares commenced trading at ₹152 on the NSE SME platform, representing a substantial gain of 90% from the IPO price of ₹80 per share.

The IPO, open for bidding from 19th August to 21st August 2024, received an overwhelming response from investors, closing with an impressive overall subscription rate of 657.81 times. This strong demand indicates the market's confidence in the company's business model and growth potential, particularly in the logistics sector, which has seen rapid expansion in recent years.

The Brace Port Logistics IPO was structured as a book-built issue aimed at raising ₹24.41 crores by issuing 30.51 lakh fresh equity shares. The price band was set between ₹76 and ₹80 per share, and the minimum lot size for retail investors was 1,600 shares, requiring an investment of at least ₹128,000. High Net-Worth Individuals (HNIs) needed to invest at least two lots, amounting to ₹256,000.

The IPO saw extraordinary subscription levels across all investor categories. Retail investors led the charge, with their category subscribing at a remarkable 588.74 times. Non-institutional investors (NIIs), including HNIs, also showed significant interest, with their category seeing a subscription rate of 854.49 times. The Qualified Institutional Buyers (QIBs) were not far behind, with a subscription rate of 450.04 times. This substantial participation from various investor classes underscores the market's positive outlook on Brace Port Logistics and its prospects.

Incorporated in November 2020, Brace Port Logistics Limited specialises in providing ocean cargo logistics services. It caters to clients across various sectors, including medical supplies, pharmaceuticals, sports goods, perishables, electronics, consumer durables, and automotive industries. The company has a strong international presence, serving markets in Germany, Vietnam, UAE, Hong Kong, and Bangladesh. In addition to ocean freight, Brace Port Logistics offers air freight, warehousing, special cargo handling, and customs clearance services.

Despite being a relatively young company, Brace Port Logistics has earned multiple certifications, including ISO 9001:2015 for Quality Management Systems, ISO 14001:2015 for Environmental Management Systems, and ISO 45001:2015 for Occupational Health and Safety Management Systems. These certifications reflect the company's commitment to maintaining high standards in its operations.

Financially, the company has shown resilience and growth, although it reported a decrease in revenue and profit for the financial year ending March 31, 2024, compared to the previous year. The revenue for FY 2024 stood at ₹5,524.59 lakhs, down from ₹7,093.66 lakhs in FY 2023. Similarly, the Profit After Tax (PAT) for FY 2024 was ₹489.13 lakhs, compared to ₹618.09 lakhs in the previous year. Despite this dip, the company's assets have increased to ₹2,783.29 lakhs, and its net worth has strengthened to ₹1,377.18 lakhs, supported by reserves and surpluses amounting to ₹552.18 lakhs.

Holani Consultants Private Limited was pivotal as the book-running lead manager for the IPO, ensuring its successful execution. Link Intime India Private Ltd was appointed as the registrar for the issue, and Holani Consultants also acted as the market maker, responsible for providing liquidity and stability to the newly listed shares.

The company's promoters include Skyways Air Services Private Limited, Mr Yash Pal Sharma, Mr Tarun Sharma, Mr Sachin Arora, and Mr Rishi Trehan. These individuals and entities have a significant stake in the company's success, holding a substantial portion of the pre-and post-IPO equity.

The Brace Port Logistics IPO also attracted significant interest from anchor investors, who invested ₹4.30 crores on 16 August 2024. The anchor portion comprised 537,600 shares, with a lock-in period for 50% of the shares ending on 21st September 2024 and the remaining on November 20, 2024. This anchor investment further underscores the confidence of institutional investors in the company's long-term potential.

Brace Port Logistics IPO has made a strong entry into the stock market, reflecting investor confidence and the company's promising future. The extraordinary subscription rates across retail, NII, and QIB categories highlight the market's optimism regarding the company's growth prospects in the logistics sector. Despite some financial challenges in the past year, Brace Port Logistics has demonstrated its ability to expand and adapt, with a solid foundation for future growth.

To Summarise

As the company continues to serve diverse industries and expand its global footprint, it is well-positioned to capitalise on the increasing demand for efficient and reliable logistics services. Investors looking for long-term growth opportunities may find Brace Port Logistics a compelling addition to their portfolios. However, as with any investment, potential investors should consider the inherent risks and market volatility associated with newly listed companies. Brace Port Logistics' strong market debut and strategic positioning in the logistics industry make it a noteworthy player to watch in the coming years.