What You Must Know About Rapid Multimodal Logistics IPO: Price Band ₹84 Per Share

Rapid Multimodal Logistics Limited, a Chennai-based business incorporated in July 2020, offers its customers a one-stop logistical solution. The company's primary market is the industry's B2B sector.

The business provides services for both single and Multimodaltransportation. These services include integrating several forms of transportation—such as land, air, and sea—into a single supply chain to increase productivity and satisfy cargo demands. Planning, route optimisation, carrier selection, paperwork, containerisation, tracking, communication, last-mile delivery, and performance assessment are all included.

Glass, plywood, paper, edible oil, gypsum boards, iron and steel, scraps, tiles, sanitary, and liquor are just a few industries the company serves. The company have employed 17 people as of January 2024.
 

The Objective of the Issue

• Working Capital Requirements: Rapid Multimodal Logistics aims to enhance its working capital to support day-to-day operations. The funds will meet the company's short-term obligations, ensuring smooth business functions, managing inventory, covering operational costs, and facilitating uninterrupted services across its logistics network.
• General Corporate Purposes: The company intends to allocate a portion of the proceeds for general corporate purposes, including strengthening the company's overall financial health, meeting any unforeseen expenditures, expanding business operations, and supporting future growth initiatives. This will help maintain a competitive edge in the logistics industry.

Highlights of Rapid Multimodal Logistics IPO

Rapid Multimodal Logistics IPO is set to launch with a fixed price issue of ₹8.49 crores. The issue comprises a fresh issue of 10.11 lakh shares. Here are the key details of the IPO:

• The IPO opens for subscription on August 22, 2024, and closes on August 27, 2024.
• The allotment is expected to be finalised on Wednesday, August 28, 2024.
• Refunds will be initiated on Thursday, August 29, 2024.
• Credit shares to Demat accounts are also expected on Thursday, August 29, 2024.
• The company will tentatively list on BSE SME on Friday, August 30, 2024.
• The price is fixed at ₹84 per share.
• The lowest lot size for the IPO application is 1600 shares.
• Retail investors need to invest a minimum of ₹134,400.
• The minimum investment for High-Net-Worth Individuals (HNIs) is 2 lots (3,200 shares), amounting to ₹268,800.
• Gretax Corporate Limited is the book-running lead manager for the IPO.
• Bigshare Services Pvt Limited serves as the registrar.

Rapid Multimodal Logistics IPO - Key Dates

Here is the timeline for the Rapid Multimodal Logistics IPO:

Rapid Multimodal Logistics IPO Issue Details/Capital History

The Rapid Multimodal Logistics initial public offering (IPO) is priced at Rs 8.49 crores. The 10.11 lakh shares in question are a completely new offering.

The subscription period for the Rapid Multimodal Logistics IPO begins on August 22 and ends on August 27. The allocation will be completed on Wednesday, August 28, 2024. The tentative listing date for the Rapid Multimodal Logistics IPO is Friday, August 30, 2024, and it will take place on the BSE SME.

Rapid Multimodal Logistics IPO Allocation & Minimum Investment Lot Size

The IPO shares of the business are distributed as follows:

The minimum number of 1600 shares and multiples are up for bid. Below is a table that shows the lowest and maximum shares and the number of investments made by HNIs and retail investors.

SWOT Analysis: Rapid Multimodal Logistics Limited IPO

Strengths:

• Established Market Presence: Rapid Multimodal Logistics Limited has a well-established presence in the logistics industry, with a comprehensive network across multiple regions. This positions the company as a strong player in the sector, providing a competitive edge.
• Diverse Service Portfolio: The company offers a wide range of logistics services, including transportation, warehousing, and supply chain management, which allows it to cater to various customer needs and diversify revenue streams.
• Strong Financial Performance: Consistent revenue growth and profitability over the past few years indicate a robust financial position. This financial strength enhances investor confidence in the company's ability to generate returns.
• Technological Advancements: Adopting modern logistics technologies, such as real-time tracking and automation, has improved operational efficiency, customer satisfaction, and cost management, making the company more competitive.

Weaknesses:

• High Operating Costs: The logistics industry is capital-intensive, and Rapid Multimodal Logistics faces high operating costs, particularly in fuel, labour, and maintenance. These costs can impact profit margins, especially during economic downturns.
• Dependency on External Factors: The company’s performance is heavily influenced by external factors such as fuel prices, regulatory changes, and economic conditions, making it vulnerable to market fluctuations.
• Limited Global Reach: Although the company has a strong regional presence, its global footprint is limited compared to some of its larger competitors. This could restrict its ability to tap into international markets and growth opportunities.

Opportunities:

• Expansion into Emerging Markets: The growing demand for logistics services presents a significant opportunity for the company to expand its operations and increase market share.
• E-commerce Growth: E-commerce growth presents a lucrative opportunity for logistics providers. The company can capitalise on this trend by enhancing last-mile delivery services and boosting revenues.
• Strategic Partnerships and Acquisitions: Forming strategic alliances or acquiring smaller logistics firms could enable Rapid Multimodal Logistics to expand its service offerings, enter new markets, and strengthen its competitive position.
• Sustainability Initiatives: There is a rising demand for eco-friendly logistics solutions. By investing in sustainable practices, such as green transportation and energy-efficient warehouses, the company can attract environmentally conscious clients and differentiate itself in the market.

Threats:

• Intense Competition: The logistics industry is highly competitive, with numerous players vying for market share. This intense competition could lead to price wars, squeezing profit margins.
• Economic Uncertainty: Economic downturns or fluctuations can reduce the demand for logistics services, impacting the company’s revenues and profitability.
• Regulatory Challenges: The logistics industry is subject to various regulations, including transportation, safety, and environmental standards. Compliance with these regulations can be costly and may impact operations.
• Technological Disruptions: Rapid technological advancements, such as autonomous vehicles and drone deliveries, could disrupt traditional logistics models. Failure to adapt to these changes could place the company at a competitive disadvantage.

Financial Highlights: Rapid Multimodal Logistics Limited IPO

Rapid Multimodal Logistics Limited has shown impressive financial growth over the past few years, as reflected in its restated financial information. The company’s total assets have increased significantly from ₹4.96 lakhs in March 2021 to ₹1,132.34 lakhs by September 2023, indicating substantial investment in expanding logistics infrastructure and capabilities. This asset growth aligns with the company’s rising revenue, which jumped from ₹4,774.40 lakhs in March 2022 to ₹7,296.17 lakhs in March 2023. By September 2023, the revenue stood at ₹3,474.05 lakhs, showcasing mid-year solid performance and the company’s ability to capture more market share.

Profitability has also seen a positive trend, with the company moving from a slight loss of ₹0.32 lakhs in March 2021 to a profit of ₹95.43 lakhs in March 2022, which further increased to ₹200.48 lakhs by March 2023. As of September 2023, the profit after tax was ₹106.38 lakhs, demonstrating consistent profitability and financial health. The company's net worth has grown alongside its profits, increasing from ₹4.68 lakhs in March 2021 to ₹406.58 lakhs by September 2023, reflecting a stronger financial foundation and increased shareholder equity.

The reserves and surplus have similarly improved, shifting from a deficit of ₹0.32 lakhs in March 2021 to ₹401.58 lakhs by September 2023, indicating the accumulation of retained earnings and a solid financial base. While the company’s borrowings have fluctuated, peaking at ₹357.59 lakhs in March 2022, dropping to ₹227.88 lakhs by March 2023, and then rising again to ₹508.18 lakhs by September 2023, these changes suggest active financial management to support the company’s expansion efforts. Overall, Rapid Multimodal Logistics Limited’s financial trajectory shows significant growth, stability, and potential, making it an attractive prospect for investors.