Zaggle Prepaid Ocean Services IPO: 10 things to know before subscribing to the Rs 563 crore issue
“It is a leading player in spend management, with more than 50 million prepaid cards issued in partnership with banking partners and more than 2.27 million users served, as of March 31, 2023,” HDFC Securities said.
Zaggle Prepaid Ocean Services’ Rs 563.38 crore IPO will open for subscription today. Ahead of the IPO, the company has raised Rs 253.52 crore from 23 anchor investors. The offer comprises a fresh issue of shares worth Rs 392 crore and an offer-for-sale (OFs) of 1,04,49,816 equity shares.
Here are 10 key things to know before subscribing to the offer:
1) IPO Dates
The IPO will open for subscription today i.e., September 14, 2023, and end on September 18, 2023.
2) Price Band
The price band for the issue has been fixed at Rs 156–164.
3) Offer Details
Zaggle Prepaid Ocean Services aims to raise Rs 563.38 crore via IPO. The offer comprises a fresh issue of shares worth Rs 392 crore and an offer-for-sale (OFs) of 1,04,49,816 equity shares by eight selling shareholders. Ahead of the IPO, Zaggle has raised Rs 253.52 crore from 23 anchor investors.
Morgan Stanley Asia (Singapore), Matthews Asia Funds, Neuberger Berman Emerging Markets Equity Fund, Eastspring Investments India Fund, Astorne Capital VCC - Arven, Copthall Mauritius Investment, Societe Generale, and Goldman Sachs (Singapore), and Natixis International Funds were among the marquee investors that participated in the anchor book as part of qualified institutional buyers (QIB).
Other investors such as Kotak Equity Opportunities Fund, ICICI Prudential, LIC Mutual Fund, Abakkus Diversified Alpha Fund, Turnaround Opportunities Fund, Elara India Opportunities Fund, Valuequest Scale Fund, Founders Collective Fund, and Ananta Capital Ventures Fund also invested in Zaggle via the anchor book.
4) Objectives of Issue
Zaggle will use the proceeds from the issue for customer acquisition and retention at a cost of Rs 300 crore, and the development of technology and products amounting to Rs 40 crore. It will also repay its debts of Rs 17.08 crore via fresh issue money. The company will also use the proceeds to fund expenditures toward customer acquisition, retention and development of technology and products.
5) Lot Size
Investors can bid for a minimum of 90 equity shares and multiples of 90 after that. Hence the minimum investment by retail investors would be Rs 14,040 (90 (Lot size) x 156 (lower price band)). At the upper end, the bidding amount will increase to Rs 14,760.
6) Company Profile
Zaggle Prepaid Ocean Services Limited (ZPOSL) is among a small number of uniquely positioned players with a diversified offering of fintech products and services, having one of the largest number of issued prepaid cards in India in partnership with certain of its banking partners (which constituted approximately 16.0 percent of India’s total prepaid transaction volume, as of March 31, 2023), a diversified portfolio of SaaS, including tax and payroll software, and a wide touchpoint reach.
“It is a leading player in spend management, with more than 50 million prepaid cards issued in partnership with banking partners and more than 2.27 million users served, as of March 31, 2023,” according to HDFC Securities.
It is sector agnostic, and its network of corporate customers covers the banking and finance, technology, healthcare, manufacturing, FMCG, infrastructure and automobile industries, among others, where it has relationships with brands such as TataSteel, Persistent Systems, Vitech, Inox, Pitney Bowes, Wockhardt, Mazda, Hiranandani group, Cotiviti and Greenply Industries.
7) Financials
The company has recorded a consolidated net profit of Rs 22.9 crore on revenue of Rs 553.46 crore for the financial year ended March FY23. The numbers are not comparable with previous financial years which are standalone numbers.
8) Promoters
Promoters hold a 57.91 percent stake in the company and the rest of the shareholding is held by the public including Zuzu Software Services (the largest shareholder with a 17.8 percent stake), and VenturEast Proactive Fund LLC (7.42 percent). ICICI Securities, Equirus Capital, IIFL Securities, and JM Financial are the merchant bankers to the issue, while KFin Technologies is the registrar.
9) Risk Factors
The company’s recent revenue growth rates may not be indicative of future financial performance and Zaggle has a limited operating history at its current scale. The key concern is its inability to retain and attract customers, convert customers using its beta or trial versions into paying customers, or expand usage of its products within or across customer organizations. Another risk factor is the termination of, or failure to maintain, relationships with banking partners, including Preferred Banking Partners, or any changes to interchange fees due to a variety of factors.
10) Listing Date
Zaggle Prepaid Ocean Services shares will be listed on both NSE and BSE. The stock is expected to list on Wednesday, September 27, 2023. However, no official announcement has been made till now.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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