Tejas Cargo NSE SME Listing

Tejas Cargo Limited, a logistics and cargo transportation services provider operating since March 2021, made a subdued entry into the public markets on Monday, February 24, 2025. Tejas Cargo Limited, listed on NSE SME, specialises in express road transportation services under the Full Truck Load (FTL) model, catering to diverse sectors such as logistics, steel, e-commerce, FMCG, and white goods. By leveraging its asset-light business approach, the company ensures efficient and reliable cargo movement, meeting the transportation needs of businesses across industries.

Tejas Cargo Listing Details 

The company's market debut presented a disconnect between primary market enthusiasm and secondary market valuation:

• Listing Time & Price: Tejas Cargo Limited  IPO price band is set at ₹168 per share, establishing the benchmark for its market debut on NSE SME. This pricing reflects investor interest and the company's valuation as it looks to raise capital for expansion and operational growth.
• Issue Price Context: Tejas Cargo Limited has priced its IPO at ₹168 per share, with a minimum lot size of 800 shares. 
• Price Evolution: As of 10:47 AM IST on February 24, 2025, Tejas Cargo India Limited's stock was trading at ₹168.50, with an intraday high of ₹175.00, reflecting a 4.17% increase from its issue price of ₹168. 

First-Day Trading Performance of Tejas Cargo

The trading activity showed active participation with the bearish sentiment:

• Volume and Value: With 99.89% of the transacted stock marked for delivery, the trading volume reached 14.66 lakh shares, resulting in a turnover of ₹25.55 crore.
• Demand Dynamics: Retail investors must invest at least ₹1,28,000 to participate. However, given the high demand, investors are encouraged to bid at the cutoff price of ₹1,34,400 to improve their chances of allotment and avoid missing out due to oversubscription.

Market Sentiment and Analysis

• Market Reaction: Flat opening followed by volatility
• Subscription Rate: The IPO had been subscribed 1.15 times overall
• Category-wise Response: HNI requires a minimum lot size investment of two lots (1,600 shares), or ₹2,68,800.

Growth Drivers and Challenges 

Tejas Cargo Limited operates in a dynamic and fast-growing logistics sector, benefiting from industry trends while facing certain challenges that could impact its growth trajectory.
 

Growth Drivers

Tejas Cargo Limited is well-positioned for expansion and is backed by strong industry trends and strategic advantages.

• Strong Industry Demand: Increasing demand for logistics and cargo transportation, especially in sectors like e-commerce, FMCG, and manufacturing.
• Asset-Light Business Model: Focus on third-party fleet partnerships helps reduce capital expenditure and enhances scalability.
• Expanding Market Presence: Growing footprint across multiple regions, enabling wider service coverage and customer acquisition.
• Technology Integration: Adoption of GPS tracking, fleet management systems, and automation to improve operational efficiency.
• Strategic Client Relationships: Strong partnerships with key industries ensure consistent revenue and long-term business growth.
• IPO Fund Utilization: Capital raised through IPO can be used for expansion, infrastructure development, and working capital needs.

Challenges:

Despite its growth potential, Tejas Cargo Limited faces several industry and operational challenges that could impact its long-term success.

• High Competition: Intense rivalry in the logistics sector from established players and emerging startups.
• Operational Risks: Dependency on third-party fleet operators can lead to service disruptions and reliability concerns.
• Cost Fluctuations: Rising fuel prices, toll charges, and transportation costs can impact profit margins.
• Regulatory Compliance: Compliance with evolving government regulations and taxation policies can be challenging.
• Client Concentration Risk: Dependence on a few large clients may pose a revenue risk if contracts are not renewed.
• Economic Slowdown Impact: Any downturn in industrial and trade activities can directly affect demand for logistics services.

Utilisation of IPO Proceeds 

The company has proposed to use ₹31.76 crore of IPO proceeds for the purchase of additional trailers

• The company will use ₹30 crore to fund working capital needs 
• ₹15 crore for repayment and pre-payment of certain borrowings availed by the company.
• The rest of the funds would be used for general corporate purposes.

Financial Performance of Shanmuga Hospital

The company has shown steady growth:

• Revenue of ₹255.09 crore in September 2024
• H1 FY2025 (ended September 2024) showed a PAT of ₹8.75 crore
• Net Worth of ₹63.16 crore as of September 2024
• Total borrowings of ₹206.28 crore
• Total assets of ₹294.29 crore as of September 2024

As Tejas Cargo starts its journey as a publicly listed company, investors will watch how well it grows and manages its operations. Despite strong demand for its IPO, the stock's flat opening and later ups and downs show investors are cautious about its valuation in the competitive logistics industry. The company's ability to expand, control costs, and maintain good service will be crucial for its stock price to recover and gain investor trust.