Zaggle Prepaid Ocean Services Limited is making waves in the financial sector with its upcoming Initial Public Offering (IPO), scheduled to open for subscription on September 14, 2023. As a prominent player in the fintech industry, Zaggle Prepaid Ocean Services’ IPO has attracted significant attention from investors. In this comprehensive article, we will provide you with a detailed overview of the Zaggle Prepaid Ocean Services IPO, including key dates, company information, key positive and negative factors, and a comprehensive review to help you make an informed investment decision.
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Zaggle Prepaid Ocean Services IPO Details
| IPO Opening Date | 14-Sep-23 |
| IPO Closing Date | 18-Sep-23 |
| IPO Listing Date | 27-Sep-23 |
| Issue Type | Book Built Issue IPO |
| Face Value | Rs 1 per equity share |
| IPO Price band | Rs 156 to Rs 164 per equity share |
| Lot Size | 90 Shares |
| Min Order Quantity | Shares |
| Listing at | BSE and NSE |
| Total Issue Size | Rs. 563.38 Crores |
| Fresh issue | Rs. 392 Crores |
| OFS | Rs. 171.38 Crores |
Zaggle IPO Timetable
| IPO Opens on | 14-Sep-23 |
| IPO Closes on | 18-Sep-23 |
| Basis of Allotment | 22-Sep-23 |
| Initiation of Refunds | 25-Sep-23 |
| Credit of Shares to Demat | 26-Sep-23 |
| Listing Date | 27-Sep-23 |
| Cut-off time for UPI mandate confirmation | 18-Sep-23 |
About Zaggle Prepaid Ocean Services Ltd
Established in 2011, Zaggle Prepaid Ocean Services specializes in providing innovative fintech products and services designed to streamline corporate business expenses. With a diverse clientele spanning industries such as banking and finance, technology, healthcare, manufacturing, FMCG, infrastructure, and automobiles, the company has carved out a significant presence in the fintech sector.
Zaggle Prepaid Ocean Services operates through seven offices across India, serving over 1.7 million end-users and more than 1,750 customers. Notable clients include TATA Steel, Persistent Systems, Inox, Pitney Bowes, and many more.
Zaggle Prepaid Ocean Services Ltd Financials
Here are the financial highlights of the company as of March 31, 2023:
| Financial Year ending / Period ending (Amt in Crores) | |||
| Particulars | FY21 | FY22 | FY23 |
|---|---|---|---|
| Assets | 62.08 | 92.65 | 234.76 |
| Revenue | 240.29 | 371.66 | 554.58 |
| Profit After Tax | 19.30 | 41.92 | 22.90 |
Objects of the Issue
The Zaggle Prepaid Ocean Services IPO includes an Offer for Sale (OFS) where the proceeds will go to selling shareholders, as well as a fresh issue. The net proceeds from the fresh issue will be allocated to the following objectives:
- Expenditure towards Customer acquisition and retention.
- Expenditure towards the development of technology and products.
- Repayment/ pre-payment of certain borrowings, in full or part, availed by the company.
- General corporate purposes.
IPO Valuation of Zaggle Prepaid
The IPO price band for Zaggle Prepaid Ocean Services is Rs 156 to Rs 164.
- If we consider last year FY23 EPS of Rs 2.46, P/E ratio works out to be 67x
- If we consider last 3 years weighted EPS of Rs 3.11, P/E ratio works out to be 53x
- Means, company is asking for IPO price in the P/E ratio of 53x to 67x.
There are no listed peers who are in similar business, hence we cannot ascertain whether the issue price is under priced or over priced. However, in general the P/E range looks very high.
Zaggle Prepaid Ocean Services IPO – Positive Factors
- Diverse Client Base: Serving a wide range of industries reduces dependency on any single sector.
- Strong Revenue Growth: Zaggle Prepaid Ocean Services has demonstrated consistent revenue growth, indicating a robust market position.
- Commitment to Innovation: The company’s expansion efforts and diverse product offerings signify a forward-looking approach.
Risk Factors
- Raw Material Procurement: Lack of long-term agreements with suppliers for raw materials could impact production.
- Sensitivity to Market Fluctuations: The company is sensitive to fluctuations in the market, which could affect profitability.
- Market Dependency: A significant portion of domestic sales comes from specific regions, posing risks if adverse developments occur.
- Working Capital Intensity: The high-volume, low-margin business model makes the company vulnerable to cash flow challenges.
- Competitive Landscape: The fintech industry has low barriers to entry, and competition from new entrants could affect market share.
- Related Party Transactions: Past and potential related party transactions could raise concerns about conflicts of interest.
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Zaggle Prepaid Ocean Services IPO Review – Should You Apply?
The Zaggle Prepaid Ocean Services IPO presents both opportunities and challenges. Consider these key points before making an investment decision:
Pros:
- Diverse customer base.
- Steady revenue growth.
- Expansion efforts.
- Commitment to innovation.
Cons:
- OFS portion goes to selling share holders.
- IPO valuation cannot be ascertained whether under priced or over priced as there are no listed peers.
- Sensitivity to market fluctuations.
- Regional market dependency.
- High working capital intensity.
- Competitive industry landscape.
- Potential conflicts of interest.
High risk investors can invest in this IPO for medium to long term perspective.
Suresh KP is the Founder of Myinvestmentideas. He is NISM Certified – Investment Adviser and NISM Certified – Research Analyst. He has been analyzing financial markets in the last 20 years.He can be reached at suresh@myinvestmentideas.com
