What You Must Know About Brace Port Logistics: Price ₹80 per share

About Brace Port Logistics

Brace Port Logistics is a young company established in November 2020. It specialises in providing ocean cargo shipping services to various industries. These services help clients transport goods overseas via sea freight. To be a comprehensive logistics provider for clients, Brace Port offers ocean cargo shipping, air freight, warehousing, international transport of speciality cargo, customs clearance assistance, etc.

The company has built a vast network serving customers in medical supplies, pharmaceuticals, sports equipment, food items, consumer electronics, and automotive.

The Objective of the Issue

The main objectives of Brace Port Logistics IPO are:

• Funding the Working Capital Requirements: This involves using the IPO proceeds to ensure that Brace Post Logistics has sufficient cash flow to cover its day-to-day operational expenses, such as purchasing inventory, paying suppliers, and managing overhead costs. This support is crucial for the company to maintain smooth and efficient operations.
• General Corporate Purposes: This broad category allows Brace Post Logistics to allocate IPO funds toward various business needs that may arise. This can include activities such as expansion, acquisitions, research and development, or enhancing existing infrastructure. The goal is to strengthen the company's overall position and support its long-term growth strategy.

Highlights of Brace Port Logistics IPO

Brace Port Logistics IPO is set to launch with a fixed price issue of ₹24.41crores. The issue comprises a fresh issue of 30.51 lakh shares with no offer-for-sale component. Here are the key details of the IPO:

• The IPO opens for subscription on August 19, 2024, and closes on August 21, 2024.
• The allotment is expected to be finalised on Thursday, August 22, 2024.
• Refunds will be initiated on Friday, August 23, 2024.
• Credit shares to Demat accounts are also expected on Friday, August 23, 2024.
• The company will tentatively list on BSE SME on Monday, August 26, 2024.
• The price is fixed at ₹80 per share.
• The lowest lot size for the IPO application is 1600 shares.
• Retail investors need to invest a minimum of ₹128,000.
• The minimum investment for High-Net-Worth Individuals (HNIs) is 2 lots (3,200 shares), amounting to ₹256,000.
• Holani Consultants Private Limited is the book-running lead manager for the IPO.
• Link Intime India Private Ltd serves as the registrar.

Brace Port Logistics IPO - Key Dates

The overall timeline for the Brace Port Logistics IPO is as follows:

Brace Port Logistics Limited Issue Details/Capital History

Brace Port Logistics Limited is offering 3,051,200 new equity shares to public investors through an Initial Public Offering (IPO) on the NSE SME platform. The IPO price is set at ₹80 per share with a minimum application amount of around 1,600 shares. The IPO aims to raise capital for the company. The public offer opens on August 19, 2024 and closes on August 21, 2024. Post IPO, total shareholding will increase from 3,051,200 to 244,100,000 shares.

Brace Port Logistics Limited Allocation & Minimum Investment Lot Size

The IPO shares of the company are distributed as follows:

Investors can apply for shares in multiples of the minimum bid lot of 1,600 shares. The table below shows the minimum and maximum number of shares and amounts invested by both retail investors and High Networth Individuals (HNIs).

SWOT Analysis: Brace Port Logistics  Limited

Strengths

• Wide customer network: Brace Port Logistics has a wide customer network. The company serves clients across multiple industries, both in India and globally.
• End-to-end logistics services: The company's key strength is providing end-to-end logistics services for ocean cargo shipping, air freight, warehousing, and speciality transport of sensitive cargo shipments.
• The agility of young company: Established in 2020, Brace Port Logistics is likely to be more agile and adaptive to changing technology/innovation as a start-up, which gives it an advantage over legacy players.
• Diverse customer base: The company caters to a diverse set of customer sectors across industries like medicine, pharmaceuticals, consumer goods, etc. Therefore, Brace Port Logistics does not depend only on a few industries for its business.

Weaknesses

• Lacks scale and assets: As a young company established recently in 2020, Brace Port Logistics likely lacks the scale, experience and financial assets compared to larger, more established players in the logistics sector.
• Limited logistics sector expertise: Given the current indications of Brace Port Logistics serving more global customers, they may have less expertise and relationships regarding intricate aspects of Indian supply chain operations than competitors.

Opportunities

• Revenue growth potential: With growing Indian and international trade, there are increased opportunities for Brace Port Logistics to expand revenue.
• Geographic and sector expansion: The company can expand its network to more geographic regions and industries to reach new customer segments.
• Leverage technology: Brace Port Logistics can leverage the latest technology more to improve its operations and enhance customer experience.

Threats

• Competitive intensity: In the logistics sector, Brace Port, as a young company, faces intense competition from entrenched, dominant players.
• Macro-economic issues: Potential economic downturns in the future can negatively impact trade volumes and revenue for logistics companies like Brace Port.
• Rising operational costs: Brace Port Logistics's profit margins may shrink with increasing fuel and transportation costs.

Financial Highlights: Brace Port Logistics IPO

Brace Post Logistics has demonstrated varied financial performance over the past four fiscal years. The company's assets have shown a significant increase, growing from ₹1,179.14 lakhs in FY22 to ₹2,783.29 lakhs in FY24, which indicates ongoing investments and expansion efforts. However, the revenue trajectory reflects some volatility, with a peak of ₹7,093.66 lakhs in FY23, followed by a decline to ₹5,524.59 lakhs in FY24, down from ₹5,419.57 lakhs in FY22. Despite the fluctuation in revenue, the company's Profit After Tax (PAT) has also seen ups and downs, decreasing from ₹618.09 lakhs in FY23 to ₹489.13 lakhs in FY24, though still an improvement from ₹322.39 lakhs in FY22.

The net worth of Brace Post Logistics has increased significantly over this period, rising from ₹419.96 lakhs in FY22 to ₹1,377.18 lakhs in FY24, showcasing the strengthening of the company's financial position. However, the reserves and surplus show a mixed trend, with a peak at ₹813.05 lakhs in FY23, followed by a decline to ₹552.18 lakhs in FY24. The company's borrowing has slightly decreased from ₹59.10 lakhs in FY23 to ₹48.97 lakhs in FY24, suggesting a cautious approach towards debt while maintaining growth.