Zaggle Prepaid Ocean Services IPO opens today: GMP, review, other key details. Should you subscribe or not?

CoinBlock.Asia 2023-09-13 18:09

Zaggle IPO has reserved not more than 75% of the shares in the public issue for Qualified Institutional Buyers (QIB), not less than 15% for Non Institutional Investors (NII), and not less than 10% of the offer is reserved for Retail Investors.

Zaggle IPO floor price is 156 times the face value and the cap price is 164 times the face value.

As per the Red Herring Prospectus (RHP), the company does not have any listed industry peers in India or abroad.

Zaggle provides cutting-edge financial solutions with the goal of empowering enterprises, startups, and SMEs. For the fiscal year that ended on March 31, 2022, Zaggle reported total revenues of ₹371.66 crores. Its assets were worth ₹234.76 crores as of March 31, 2023, while its revenue was ₹554.58 crores. The net worth increased to ₹48.75 crores due to the profit after taxes of ₹22.90 crores, which was supported by reserves and a surplus of ₹39.36 crores.

However, it’s worth noting that the company’s financial journey includes periods of losses, as indicated by the profit after tax of ₹338.59 crores as of March 31, 2023, according to reports.

On day 1, Zaggle IPO subscription status was 19%. Retail Individual Investors portion was subscribed 87%.

Also Read: Zaggle Prepaid Ocean Services IPO opens tomorrow; GMP, price band, dates and other details to know

Zaggle IPO details

Zaggle IPO is made up of fresh issue comprises of shares worth ₹392 crore and offer for sale (OFS) portion consists of 10,449,816 shares of ₹1, which aggregates to ₹171.38 crore sold by promoter selling shareholder Raj P Narayanam, Avinash Ramesh Godkhindi, and other selling shareholders . Zaggle IPO total issue size is ₹563.38 crores.

The company plans to use the net proceeds from the offering to fund customer acquisition and retention costs, product and technology development costs, general corporate expenses, and the repayment or prepayment of some borrowings that the company has taken out, in full or in part.

ICICI Securities Limited, Equirus Capital Private Limited, IIFL Securities Limited and JM Financial Limited are the book running lead managers to the Offer. Kfin Technologies Ltd is the offer’s registrar.

Zaggle IPO Review

According to Dilip Davda, the contributing editor at Chittorgarh, 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.

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Zaggle has incorporated a wide range of capabilities into a single platform, making it one of the most feature-rich consumer solutions, said domestic brokerage house, Choice Equity Broking Pvt Ltd. The company’s top line has grown tremendously. The company has a promising future thanks to the debut of its new platform, “Zoyer,” and continual efforts to grow its customer base.

“According to the company’s RHP, there are no other publicly listed firms, both in India and abroad, that engage in a business similar to that of Zaggle. However, the company’s P/E multiple at a higher price band, after adjusting for post-IPO fully diluted paid-up equity, comes out to 87.4x (to its FY23 EPS of Rs. 1.9), which seems to be aggressively priced and thus we assign ‘Subscribe with caution’ rating to this issue,” said Choice Equity brokerage in its report.

According to Geojit Financial Services Ltd, the Zaggle IPO is available at an Adj. P/E of 54.3x (FY23), which seems to be aggressively priced, at the upper price band of ₹164. However, a number of elements, such as a varied clientele covering numerous industries, stable revenue growth over the years, the company’s expansion initiatives, a diversified revenue model, and the growing digital payments industry, all play a role in its appeal.

“Given these considerations, we recommend a ‘Subscribe’ rating for the issue on a short- to medium-term basis,” said the brokerage.

Zaggle Prepaid Ocean Services IPO GMP today

Zaggle IPO GMP today or grey market premium is +36, similar to previous trading session.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Zaggle share price is ₹200 apiece, which is 21.95% higher than the IPO price of ₹164.

Zaggle IPO GMP was ₹0 on Tuesday, which meant shares were trading at their issue price of ₹164 with no premium or discount in the grey market according to topsharebrokers.com

‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.