The Silk Logistics Ltd (ASX: SLH) share price has shot up 25% in afternoon trading, after successfully completing its initial public offering (IPO) at a valuation of just over $181 million.
Silk Logistics shares were exchanging hands at $2.50 apiece at the close of trade today. Let's take a quick look at what went down in today's session.
Who is Silk Logistics?
Formed in 2014, Silk Logistics is a Melbourne-based company operating in the domain of supply chains.
The company aims to align itself with recession-resistant sectors, such as specialised retail, light industrial, or food.
In its prospectus, the company says its business model is based on the concept of 'port to door'.
This involves collecting goods from a shipping port on behalf of the customer and distributing these to any specified location from its own central warehouses.
Silk's value proposition, however, is its technology that tracks a delivery through a "single visibility layer", permitting several freight streams to a single hauler, and reducing errors.
From its website, the company states:
SCL provides three distinct services across two primary divisions: our Port Logistics division provides wharf cartage services, whilst our Contract Logistics Division offers warehousing and distribution services. SCL's long-standing blue-chip customer base spans several key industries, including FMCG, light industrial, food, specialised retail, and containerised agriculture.
What happened to Silk's share price after IPO?
An IPO is much like the new and used car markets. First, shares are first sold on the primary market (the new car) and then afterwards are sold to investors on the secondary market (used car market).
The company's shares were initially priced at $2 per share in the primary market.
From the IPO, the company successfully raised $70 million dollars, and its shares entered the secondary market just after 12pm at a price of $2.20 per share.
Immediately following, the Silk Logistics share price soared to an intraday high of $2.49 in afternoon trading.
Foolish takeaway
Silk Logistics completed its IPO today, meaning it is now listed on the ASX as a publicly-traded company.
At the current market price, the company has a market capitalisation of $189.4 million.
