Leap India

IPO Size: Rs. 2,480 cr

• Fresh Issue of Rs. 480 cr to repay Rs. 360 cr of Rs. 1,023 cr gross debt
• Offer for Sale (OFS) of Rs. 2,000 cr by financial promoter KKR, looking to trim its 68% to 35%. Along with the individual founding promoter, combined promoter stake will be 56% post IPO.

Price band: Rs. 151-159 per share

• On 5^th Aug 26, 5.67% sold for Rs. 371 cr by KKR at Rs. 159 per share. Even after this sale, OFS portion has not been reduced, which was anyways quite large. Wonder the urgency to exit!   

M cap: Rs. 7,005 cr, implying 35% dilution

IPO Date: Fri 7^th Aug to Tue 11^th Aug 2026, Listing Fri 14^th Aug 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

‘Pooled’ Supply Chain Management Company

Leap India is a 13 year old Mumbai based company providing on-demand ‘share and re-use’ assets for supply chain management. These assets comprise 9.0 million pallets, 5.7 million containers and 4,743 material handling equipment across a pan-India network of 10,100 customer touchpoints, mainly serving food and beverages, automotive, industrials and third-party logistics sectors.

 

‘Engineered’ Financials

FY26 asset utilization rates are not impressive. While pallet utilization of 89% is healthy, container utilization of 72% is poor and 80% utilization of material handling equipment has been reducing 270 bps since FY24. Fixed asset turnover ratio of 0.5x (revenue divided by net fixed assets) is also low. No wonder, on FY26 revenue of Rs. 729 cr, EBITDA margin contracted 440 bps YoY in FY26 to 48.3%.

Company mentions Cash PAT and cash PAT margin in RHP, but it will be inaccurate to value the company on cash profit by excluding depreciation as business is primarily rental income through rental of fixed assts and equipment. Business is capital intensive, with net fixed assets being Rs. 1,481 cr, as of 31.3.26, with net worth at Rs. 1,006 cr.  

To justify the financials, company has even tweaked the definition of Return on Capital Employed, by substituting EBIT with EBITDA, obviously with adequate disclosure, to confuse potential investors. Height of financial engineering!

Debtors outstanding have been over 4 months for each of the past 4 fiscals, locking capital and putting pressure on RoE.

Thus, FY26 RoE of 6.5% is lower than some of the bank fixed deposit interest rate. And it is not that business is yet to scale up – company calls itself the largest ‘on-demand’ pooled asset company.

To summarise, one can only say that the business model is yet to be proven.  

 

Heavy Dilution of over 40%

M cap of Rs. 7,005 cr is exorbitant for Rs. 62 cr PAT of FY26, implying historic PE multiple of 105x. Even Enterprise Value of Rs. 7,550 cr for Rs. 361 cr EBITDA leads to historic EV/EBITDA multiple of 21x - very pricey.

Company plans expansion in Middle East which will require more capital, but that doesn’t seem to have been budgeted for in current financials.

All this coupled with a heavy dilution of nearly 40%, including the just-concluded promoter secondary, will weigh on the IPO.

KKR had acquired majority stake in the company in Aug 2023, and within 3 years, is looking to trim nearly half its holding, which is quite early for a large exit.