Trucking unicorn BlackBuck files DRHP with SEBI to raise Rs 550 crore from IPO

Bengaluru-based trucking unicorn BlackBuck has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) an initial public offering (IPO).

The startup aims to raise Rs 550 crore through a fresh share issue. The IPO also includes an offer for sale (OFS) of 21.6 million shares by existing shareholders.

Who are the sellers in the OFS?

The offer for sale (OFS) will see several key shareholders divesting their stakes. Co-founders and promoters Rajesh Yabaji, Chanakya Hridaya, and Rama Subramaniam will sell 2.2 million shares, 1.1 million shares, and 1.1 million shares, respectively.

Major investors such as Accel, Tiger Global, and Peak XV Partners will also participate in the OFS.

Accel, which holds a 14% stake in BlackBuck, will sell 4.3 million shares and 923,282 shares through its two units.

Singapore-based Quickroutes International will offload 3.9 million shares, and the International Finance Corporation, which is backed by the World Bank, will sell 1.7 million shares and 628,315 shares through its two entities. Flipkart will sell about 2.1% stake.

US-based Sands Capital will sell 1.3 million shares, 514,745 shares and 302,328 shares, respectively, through its three entities participating in the OFS.

Meanwhile, venture funds Tiger Global Management, Peak XV Partners and B Capital will sell 883,322 shares, 640,409 shares and 529,993 shares in the OFS, respectively.

Purpose of IPO funds

The proceeds from the IPO will be allocated for various purposes. BlackBuck plans to spend Rs 200 crore on sales and marketing and invest Rs 140 crore in its non-bank financial company (NBFC) subsidiary, BlackBuck Finserve.

The net proceeds invested into the NBFC subsidiary will be utilized to augment its capital base to meet future capital requirements. Additionally, Rs 75 crore will be allocated for product development. 

What does BlackBuck do?

Founded in 2015, BlackBuck has established itself as a significant player in the trucking industry, offering services such as payments, telematics, loads marketplace, and vehicle financing.

As of March 31, the startup had 963,345 truck operators and registered 597,638 monthly transacting truck operators on its BlackBuck App in 2023-24, up from 458,025 in the previous year.

In 2021, BlackBuck became the 16th Indian startup to join the unicorn startup club. It raised $67 million in a Series E funding round at a valuation of more than $1 billion.

Is it profitable?

For the fiscal year 2023-24, BlackBuck reported operating revenue of Rs 296 crore, a substantial increase from Rs 175 crore in the previous fiscal.

However, the company also reported a loss of Rs 166 crore from continuing operations, compared to a loss of Rs 236 crore the previous year.

Axis Capital, Morgan Stanley, JM Financial, and IIFL Securities have been appointed as the book-running lead managers for the IPO. The final price band and minimum lot size will be decided in consultation with these lead managers.