Zaggle Prepaid Ocean Services IPO booked 12% on debut
On September 14, during the first day of its initial public offering (IPO), Zaggle Prepaid Ocean Services, a business spend management platform, experienced a subscription rate of 12 percent. This means that investors submitted bids for 23.01 lakh equity shares, which exceeded the offer size of 1.93 crore shares.
Zaggle Prepaid Ocean Services has set an ambitious target of raising Rs 563.38 crore through the IPO. The IPO comprises two primary components: a fresh issue of shares totaling Rs 392 crore and an offer-for-sale (OFS) segment that includes 1.04 crore shares valued at Rs 171.38 crore at the upper price band.
The response from investors on the first day of bidding indicates an initial level of interest in the IPO. As the offering continues, market participants will closely monitor the subscription levels to assess the overall demand for Zaggle Prepaid Ocean Services’ shares. The IPO’s progress will provide insights into investor sentiment and the company’s market reception.
The allocation strategy for the Zaggle Prepaid Ocean Services IPO, with 75 percent reserved for Qualified Institutional Buyers (QIBs), 15 percent earmarked for High Net Worth Individuals (HNIs), and the remaining 10 percent allocated to retail investors, offers valuable insights into the initial investor interest in the company.
The full subscription of the anchor book, even before the IPO’s official opening, signals strong interest from institutional investors, who are known for their thorough research and financial prowess. This early enthusiasm from QIBs suggests a positive market sentiment and confidence in the company’s potential.
The allocation for HNIs reflects an intention to attract high-capacity individual investors, while the 10 percent earmarked for retail investors emphasizes their importance in contributing to the overall demand for the IPO. As the offering progresses, market participants will closely monitor the subscription trend to gauge the broader demand for Zaggle Prepaid Ocean Services shares, which will be critical for the IPO’s success.
Retail investors have demonstrated strong interest in the Zaggle Prepaid Ocean Services IPO, subscribing to 58 percent of the shares allocated for them. High net worth individuals (HNIs), who are non-institutional investors, have subscribed to 5 percent of their allotted portion. Notably, qualified institutional buyers (QIBs) have yet to show their interest in the IPO.
The price band for the IPO has been set at Rs 156 to Rs 164 per share. Investors have the opportunity to subscribe to the offering until its closing date on September 18.
Zaggle Prepaid Ocean Services, which provides fintech and SaaS products and services to various corporate sectors, including banking and finance, technology, healthcare, manufacturing, FMCG, infrastructure, and the automobile industry, has already raised Rs 253.52 crore by issuing 1.54 crore equity shares to 23 anchor investors on September 13. This anchor book subscription indicates early interest from institutional investors.
As the IPO continues to unfold, market participants will closely watch the subscription levels, especially from QIBs, to assess the overall demand for the shares of Zaggle Prepaid Ocean Services.
Zaggle Prepaid Ocean Services has garnered significant support from marquee investors during its IPO’s anchor book phase, showcasing strong institutional interest in the offering. Notable participants in the anchor book include prestigious names such as Morgan Stanley Asia (Singapore), Matthews Asia Funds, Copthall Mauritius Investment, Societe Generale, Goldman Sachs, ICICI Prudential, LIC Mutual Fund, Abakkus Diversified Alpha Fund, and Elara India Opportunities Fund.
The company intends to allocate the net proceeds from the fresh issue component of the IPO for several strategic purposes. A substantial portion, approximately Rs 300 crore, will be directed towards customer acquisition and retention efforts, signaling the company’s commitment to expanding its customer base and fostering customer loyalty.
Another significant allocation of Rs 40 crore is designated for the development of technology and products, emphasizing the pivotal role of innovation and technological advancement in Zaggle’s business strategy. Additionally, a portion of the net fresh issue proceeds will be used for debt repayment, underlining the company’s focus on strengthening its financial position and reducing debt obligations. These allocations reflect Zaggle’s multifaceted approach to enhancing its business operations and driving future growth.
In the financial year ending in March FY23, Zaggle, which operates in a segment involving interactions and interfaces with both corporate customers and end-users (employees), reported a consolidated net profit of Rs 22.9 crore. This profit was achieved on a revenue of Rs 553.46 crore, indicating a robust financial performance.
Zaggle has established relationships with numerous corporate brands, including prominent names like TATA Steel, Persistent Systems, Vitech, Inox, Pitney Bowes, Wockhardt, MAZDA, PCBL (RP – Sanjiv Goenka Group), Hiranandani Group, Cotiviti, and Greenply Industries. The company claims to be a leading player in spend management, with more than 5 crore prepaid cards issued in collaboration with banking partners and over 0.23 crore users served as of March 2023.
These partnerships and user numbers highlight Zaggle’s significant presence in the spend management sector, where it caters to the financial needs of corporate clients and their employees, showcasing its strong market position and potential for growth in this segment.
