Rapid Fleet Management Services Ltd IPO

Status: Closed

Overview

IPO date

21 Mar 2025 to 25 Mar 2025

Face value

₹ 10 per share

Price

₹ 183 to ₹192 per share

Issue Size

2,284,800 shares
(aggregating up to ₹ 43.87 Cr)

Allotment Date

26 Mar 2025

Listing at

NSE

Issue type

Book Building - SME

Sector

Logistics

Objectives of Rapid Fleet Management Services Ltd IPO

Initial public offer of 22,84,800 equity shares of face value of Rs. 10.00 each ("Equity Shares") of Rapid Fleet Management Services Limited (the "Company" or the "Issuer") for cash at a price of Rs. 192.00 per equity share including a share premium of Rs. 182.00 per equity share (the "Issue Price") aggregating to Rs. 43.87 crores ("The Issue"). The issue includes a reservation of 4,21,800 equity shares aggregating to Rs. 8.10 crores will be reserved for subscription by market maker to the issue (the "Market Maker Reservation Portion"). The issue less the market maker reservation portion i.e. net issue of 18,63,000 equity shares aggregating to Rs. 35.77 crores (the "Net Issue"). The face value of the equity shares is Rs. 10.00 each and the issue price is 19.2 times of the face value.

Objectives of Rapid Fleet Management Services Ltd IPO

Rapid Fleet Management Services Ltd IPO Strategy

About Rapid Fleet Management Services Ltd

Unlock Stock of the Month

T&C*

Strengths vs Risks of Rapid Fleet Management Services Ltd

Know the pros & cons

Strengths

Implementation of an integrated TMS - Digitify Book.
In house Vehicle Fleet and its Safety for smooth operations and delivery.
Supply Chain Efficiency.
PAN India Transport.
Pride in catering to an esteemed clientele.
Dynamic Approach to Market Fluctuations.
Not compromising Quality Services.

Risks

The company business is dependent on the road network and its ability to utilize the company vehicles in an uninterrupted manner. Any disruptions or delays in this regard could adversely affect it and lead to a loss of reputation and/ or profitability.
The company business is operating under various laws which require it to obtain approvals from the concerned statutory/regulatory authorities in the ordinary course of business and its inability to obtain, maintain or renew requisite statutory and regulatory permits and approvals for the company business operations could materially and adversely affect its business, prospects, results of operations and financial condition.
There are outstanding legal proceedings involving the Company, Promoters and Directors. Any adverse decision in such proceedings may have a material adverse effect on its business, results of operations and financial condition.
Significant dependence of revenue on Full Load and Exim Services and impact of lack of experience in renewable transportation services.
Majority of its revenues are generated from the State of Tamil Nadu Any adverse development affecting the company operations in this region could have an adverse impact on its business, financial condition and results of operations.
The company inability to pass on any increase in operating expenses, particularly fuel costs, to its customers which may adversely affect the company business and results of operations.
Claims relating to loss or damage to cargo, personal injury claims or other operating risks that are not adequately insured may adversely affect its business, results of operations and financial condition.
Its Registered Office is not owned by the company. The same is occupied by it on a rental basis. Disruption of its rights as tenant or termination of the agreements with the company landlord would adversely impact its operations and, consequently, the company business.
The company relies on third party service provider for setting and maintenance of the Digitify TMS platform to handle the complete lifecycle of full truck operations, from indent creation to invoicing and any shortcomings in the services they offer could have an impact on the Company's operations.
Its business is highly dependent on technology and any disruption or failures of the company technology systems may affect its operations.
The company does not verify the contents of the parcels transported by it, thereby exposing the company to the risks associated with the transportation of goods in violation of applicable regulations.
The Company is proposing to increase its fleet of trucks and consequently also expect demand for qualified drivers to increase. The company is working in a man-power centric industry and trained and qualified drivers are crucial to its performance and if the Company is unable to attract and retain a sufficient number of qualified drivers, its business, financial condition and results of operations could be adversely affected.
The company is dependent on various third parties for the adequate and timely supply of equipment and maintenance of its vehicles, and any delays or increase in costs related thereto may adversely affect its business.
The company may be unable to meet certain contractual obligations including timelines of deliveries, due to which the company could be liable to claims by customers, suffer adverse publicity and may incur substantial costs as a result of deficiency in its services, which in turn could adversely affect its results of operations.
The company derives a majority portion of its revenue from operations from its top 10 customers, contributing 96.59%, 97.70%, 99.30% and 99.80% revenue from operations for the six months period ended September 30, 2024 and for the Financial Year ended March 31, 2024, March 2023 and March 2022 respectively. Loss of one or more of these customers or a reduction in the amount of business the company obtain from them could have an adverse effect on its business, results of operations, financial condition and cash flows.
There are certain discrepancies / errors noticed in some of its corporate records relating to forms filed with the Registrar of Companies and other provisions of Companies Act, 2013. Any penalty or action taken by any regulatory authorities in future for non-compliance with provisions of corporate and other law could impact the financial position of the Company to that extent.
The Company has a negative cash flow in its Investing activities for the six months period ended September 30, 2024 and for the Financial Year ended on March 31, 2024, March 31, 2023 and March 31, 2022 and Financing Activity for the financial year ended March 31, 2024 and March 31, 2023 details of which are given below. Sustained negative cash flow could impact its growth and business.
Its Group entities have objects similar to that of the Company's business and this could lead to a potential conflict of interest.
The company has applied for registration of its name and logo but does not own the trademark legally as on date. The company may be unable to adequately protect its intellectual property. Furthermore, its may be subject to claims alleging breach of third-party intellectual property rights.
The company may not be able to realise the amounts, partly or at all, reflected in its Order Book which may materially and adversely affect its business, prospects, reputation, profitability, financial condition and results of operation.
The company requires a number of approvals, NOCs, licenses, registrations and permits in the ordinary course of its business. Some of the approvals are required to be obtained by its Issuer Company and any failures or delay in obtaining the same in a timely manner may adversely affect its operations.
The company operates in a highly fragmented and competitive industry and may not be able to maintain its market position which may adversely affect the company business, financial condition, results of operation and cash flows.
The company depends significantly on its vendors to provide transport facilities. A loss of, or a significant decrease in services provided by its vendors could adversely affect the company business and profitability.
The average cost of acquisition of Equity Shares by the Promoters may be less than the Issue Price.
Its business involves usage of manpower and any unavailability of the company employees or any strikes, work stoppages may have an adverse impact on its cash flows and results of operations.
The company is subject to various risks associated with transportation and its may face claims relating to loss or damage to cargo, personal injury claims or other operating risks that are not adequately insured.
The company failures to perform in accordance with the standards prescribed in its client contracts could result in loss of business or payment of liquidated damages.
Some of the KMPs are associated with the Company for less than one year.
Certain documents in relation to work experience for one of its directors prior to joining the Company is not available and due to insufficient documentary evidence those experiences are not included in his brief profile in this Red Herring Prospectus.
Certain documents in relation to educational qualification for some of its Directors are not available and due to insufficient documentary evidence those qualifications are not included in their profiles in this Red Herring Prospectus.
Brand recognition is important to the success of its business, and the company inability to build and maintain the company brand name will harm its business, financial condition and results of operation.
Its success depends in large part upon the company qualified personnel, including its senior management, directors and key personnel and the company ability to attract and retain them when necessary.
Significant security breaches in its computer systems and network infrastructure and fraud could adversely impact the company business.
Its business strategies and expansion plans may be subject to various unfamiliar risks and may not be successful.
Misconduct or errors by manpower engaged by it could expose the company to business risks or losses that could adversely affect its business prospects, results of operations and financial condition.
The Company's insurance coverage may not be adequate to cover all losses associated with its business operations.
General economic and market conditions in India and globally could have a material adverse effect on its business, financial condition, cash flows, results of operations and prospects.
Major fraud, lapses of internal control, system failures, theft, employee negligence or similar incidents could adversely impact the company's business.
The company has entered into related party transactions in the past and may continue to do so in the future.
The nature of its business exposes the company to liability claims and contract disputes and its indemnities may not adequately protect the company. Any liability in excess of its reserves or indemnities could result in additional costs, which would reduce its profits.
Delays or defaults in payments from its clients could result into a constraint on the company cash flows. The efficiency and growth of its business depends on timely payments received from the company clients.
Its actual results could differ from the estimates and projections used to prepare the company financial statements.
Its ability to pay dividends in the future will depends upon the company future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in its financing arrangements.
The company future funds requirements, in the form of fresh issue of capital or securities and/or loans taken by it, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised.
There is no guarantee that its Equity Shares will be listed on the Stock Exchanges in a timely manner or at all.
The deployment of funds raised through this Issue shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.
Negative publicity could adversely affect its revenue model and profitability.
Industry information included in this Red Herring Prospectus has been derived from industry reports commissioned by it for such purpose. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.
The requirements of being a public listed company may strain its resources and impose additional requirements.
There are restrictions on daily/weekly/monthly movements in the price of the Equity Shares, which may adversely affect a shareholders' ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.
After this Issue, the price of the Equity Shares may be highly volatile, or an active trading market for the Equity Shares may not develop.
You will not be able to sell immediately on Stock Exchange any of the Equity Shares you purchase in the Issue until the Issue receives appropriate trading permissions.
The Issue price of its Equity Shares may not be indicative of the market price of the company Equity shares after the issue.
Sale of Equity Shares by its Promoters or other significant shareholder(s) may adversely affect the Trading price of the Equity Shares.