Zaggle Prepaid Ocean Services IPO

Company and IPO Overview:

Zaggle Prepaid Ocean Services provides financial technology (fintech) products and services to manage corporate business expenses through automated workflows. The company 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 TATA Steel, Persistent Systems, Vitech, Inox, Pitney Bowes, Wockhardt, MAZDA, PCBL (RP – Sanjiv Goenka Group), Hiranandani group, Cotiviti and Greenply Industries.

It is placed at the intersection of the SaaS and fintech ecosystems, and its SaaS platform is designed for:

(i) Business spends management (including expense management and vendor management);

(ii) Rewards and incentives management for employees and channel partners; and

(iii) A gift card management for merchants, which it refers to as customer engagement management system.

Zaggle Prepaid Ocean Services IPO is the next main board IPO which is ready to go public, the company is about to raise around ₹ 563.38 crores via IPO comprising Fresh Issue of ₹ 392 crores and Offer For Sale upto ₹ 171.38 crores. The price band of the issue is ₹ 156 to ₹ 164 with a minimum market lot of 90 shares. Zaggle Prepaid Ocean Services IPO subscription quota for retail is 10.00%, NII is 15.00% and QIB is 75.00%.

Financials (rounded off):

Date	Total Revenue (₹ in cr)	​​​PAT (₹ in cr)
​31/03/2021	240	19
31/03/2022	371	42
31/03/2023	553	23

Objectives of the Issue:

1. Expenditure towards Customer acquisition and retention.

2. Expenditure towards the development of technology and products.

3. Repayment/ pre-payment of certain borrowings, in full or part, availed by the company.

4. General corporate purposes.

IPO Details:

IPO Date	14/09/2023-18/09/2023
Face Value	₹1 per share
IPO Price Band	₹156-₹164 per share
IPO Lot Size	90 Shares
Listing at	NSE, BSE
Basis of Allotment	22/09/2023
Credit of Shares in Demat	26/09/2023
Listing Date	27/09/2023
Pre-Issue Shareholding	57.91%
Post-Issue Shareholding	-
Retail Minimum Lot Size	90 shares (₹14,760)

Valuations & Margins:

Indicators	FY 21	FY 22	FY 23
EPS	2.11	4.57	2.46
P/E	-	-	66.67
EBITDA (%)	11.51	16.12	8.69
ROE (%)	(42.44)	(1178.22)	47

Important things to note about the Company:

Top reasons to consider the IPO:

1. The company Zaggle Prepaid Ocean Services has a differentiated SaaS-based fintech platform, offering a combination of payment instruments, mobile applications, and API integrations.

2. Zaggle Prepaid Ocean Services is uniquely positioned as a player offering diversified services within the fintech industry. It boasts one of the largest numbers of issued prepaid cards in partnership with certain banking partners, enjoys high profitability, maintains a diversified portfolio of SaaS services, and has an extensive touchpoint reach.

3. Zaggle follows a business model with diverse sources of revenue and benefits from low customer acquisition and retention costs.

Risk Factors to watch out in the IPO:

1. The historical revenue growth rates may not necessarily reflect its future financial performance, primarily due to its limited operating history at its current scale. Failing to effectively manage this growth could have a material and adverse impact on the business.

2. Zaggle operates in a highly competitive industry, and any inability to compete successfully within this competitive landscape could have a material and adverse impact on its business.

3. Zaggle Prepaid Ocean Services has experienced negative operating cash flows in FY23 and has had negative net worth as of FY22 and FY21. These financial challenges may make it difficult or expensive for the company to obtain future financing or meet its liquidity needs.

Zaggle Prepaid Ocean Services IPO Review: The Company is a unique player in fintech products and related services with vide portfolio of offerings. Though the IPO appears greedily priced, the company is trying to encase the premium for its unique business model. However, well-informed investors may park funds for the medium to long-term rewards.

Crisp Insights:

• Zaggle Prepaid Ocean Services IPO GMP Today: The Company is commanding a NIL GMP.

• Zaggle Prepaid Ocean Services IPO Review: Listing gains unlikely as per GMP data.

• Zaggle Prepaid Ocean Services GMP is weak and hence, investors need to be careful.

Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.