Zaggle Prepaid Ocean Services LTD. IPO - Valuation, Date, Review, & GMP

Zaggle Prepaid Ocean Services Limited - Complete Overview

Established in 2011, Zaggle Prepaid Ocean Services Limited offers a diverse range of fintech products and services. 

The company is a prominent player in spend management, having partnered with banks to issue over 50 million prepaid cards and serving more than 2.27 million users as of March 31, 2023.

Zaggle Prepaid Ocean is a versatile company that caters to various industries, including banking and finance, technology, healthcare, manufacturing, FMCG, infrastructure, and automobiles. 

It has established relationships with renowned brands such as TATA Steel, Persistent Systems, Vitech, Inox, Pitney Bowes, Wockhardt, MAZDA, PCBL (RP – Sanjiv Goenka Group), Hiranandani Group, Cotiviti, and Greenply Industries.

The company's SaaS platform is designed for three primary purposes: 
1. Business spend management, encompassing expense and vendor management.
2. Rewards and incentives management for employees and channel partners.
3. Gift card management for merchants is called the Customer Engagement Management System (CEMS).

Their core product portfolio includes
1. 'Propel,' a corporate SaaS platform for channel rewards, incentives, employee rewards and recognition.
2. 'Save,' a SaaS-based platform and mobile application for expense management, facilitating digital employee reimbursements and tax benefits.
3. 'CEMS,' enabling merchants to comprehensively manage customer experiences, including rewarding customers with gift cards and loyalty benefits.
4. 'Zaggle Payroll Card,' a prepaid payroll card providing an alternative to direct deposits or cash payments for contractors, consultants, seasonal workers, and unbanked wage earners.
5. 'Zoyer,' an integrated data-driven SaaS platform for business spend management, with automated finance capabilities in core invoice-to-pay workflows.

As of March 31, 2023, the company had 1,832 corporate accounts and 579 SMB accounts. The average user base per business was 943, 983, and 828 users as of March 31, 2023, March 31, 2022, and March 31, 2021, respectively. 

It had issued 10.83 million active cards to 2,411 customers across India by March 31, 2023. According to the Frost & Sullivan Report, as of the same date, the company had served more than 2.27 million users.

 

What does the company do? 

Zaggle Prepaid Ocean Services Limited offers a diverse range of fintech products and services.

 

 

IPO Overview

The Zaggle Prepaid Ocean Services IPO date is scheduled from September 14 to September 18, 2023. It is expected to be listed on the BSE and NSE exchanges by September 27, 2023. The Zaggle Prepaid Ocean Services IPO price is set in the range of Rs. 156 to Rs. 164 per share with a face value of Rs. 1 per share.

The company aims to raise Rs. 563.38 Crores through this IPO. The allocation of shares is as follows: 75% for institutional investors, 15% for non-institutional investors, and 10% for retail investors.

 

Zaggle Prepaid Ocean Services Limited IPO timetable (Tentative)

EVENTS	DATE
IPO Opening Date	14 September 2023
IPO Closing Date	18 September 2023
IPO Allotment Date	22 September 2023
Refund initiation	25 September 2023
IPO Listing Date	27 September 2023

 

Zaggle Prepaid Ocean Services Limited IPO Details

IPO Opening & Closing Date	14 September to 18 September 2023
Face Value	Rs.1 Per Share
Issue Price	Rs.156 to Rs.164 per share
Lot Size	90 Shares
Price of 1 Lot	Rs. 14,760
Issue Size	34,352,255 Shares (aggregating up to Rs. 563.38 Cr)
Offer for Sale	10,449,816 shares of Rs. 1(aggregating up to Rs. 171.38 Cr)
Fresh Issue	23,902,439 Shares (aggregating up to Rs. 392.00 Cr)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Kfin Technologies Ltd.

 

Zaggle Prepaid Ocean Services Limited IPO Lot Details 

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	13 Lot
Minimum Lot Investment (HNI)	14 Lot
Maximum Lot Investment (HNI)	67 Lot

 

Zaggle Prepaid Ocean Services Limited IPO Reservation

Institutional share Portion	75%
Non-institutional share Portion	15%
Retail share Portion	10%

 

Company Financial

Amount in Crores

Period	FY - 23
Total Assets	234.76
Total Revenue	554.58
PAT	22.90
Net Worth	48.75
Reserve & Surplus	39.36
Total Borrowings	121.07

 

Revenue from Top Customers

(Amount in Million)

Particulars	FY 23	FY 22	FY 21
Top Five Customers	451.93	349.31	176.44
Top Ten Customers	631.36	490.94	287.29

 

Key Operational Performance Indicators of the Company

Metric	FY 23	FY 22	FY 21
Platform fee / SaaS fee / Service fee (Rs. in Million)	242.32	166.30	129.23
Program Fees (Rs. in Million)	1,694.53	2,007.03	1,954.89
Propel platform revenue/gift card (Rs. in Million)	3,597.75	1,539.22	315.54
Total Customers catered to	2,411	1,753	1,092
Aggregate Users on the platform	2,274,138	1,723,350	904,713
Average Users per account	943	983	828
Customer Acquisition and Retention Cost (Rs. in Million)	327.40	185.83	136.17
Acquisition and Retention Cost per Customer (Rs. in Million)	0.50	0.28	0.20
Cashback expense per Rs. 1 earned from revenue from operations (Rs.)	0.18	0.32	0.58
Churn (%)	1.54	0.37	1.17
Average revenue per customer (Rs. in Million)	2.30	2.12	2.20
Number of new Customers added during the year	685	665	670

 

Objective of the Issue 

The funds raised through the IPO will be allocated for the following purposes:

• Investment in customer acquisition and retention efforts.
• Investment in the development of technology and new products.
• Repayment or partial prepayment of certain outstanding borrowings taken by the company.
• General corporate purposes.

 

Promoters and Management of Zaggle Prepaid Ocean Services Limited

Raj P Narayanam and Avinash Ramesh Godkhindi are the key promoters of the Company.

Pre-issue Promoter shareholding	57.91%
Post-issue Promoter shareholding

 

Peer Comparison

According to the Zaggle IPO DRHP, the company's unique business model and diverse product portfolio do not have any direct counterparts among listed companies in India or globally.

 

IPO's Valuations

With the Zaggle Prepaid IPO share price ranging from Rs. 156 to Rs. 164 per share and an EPS of Rs. 2.46, the calculated P/E ratio comes out to be approximately 66.67.

 

Dividend Policy 

The company did not distribute dividends in the past, and any potential future dividend payments will be contingent upon the company's financial performance.

 

IPO's Strengths

• A distinct SaaS-based fintech platform that provides a blend of payment tools, a mobile application, and seamless API integrations.
• Utilization of internally developed technology and the presence of a robust network effect.
• A business model featuring multiple revenue streams and minimal expenses related to customer acquisition and retention.
• Varied customer associations spanning different industries, complemented by valued banking and merchant partnerships.
• An experienced management team with extensive domain knowledge, bolstered by a skilled and dedicated workforce.

 

IPO Weaknesses

• The company's operational history at its current scale is limited.
• There are no comparable industry peers, both domestically and internationally, making it challenging to assess and benchmark its financial performance.
• In fiscal year 2023, the company had negative operating cash flows, and as of March 31, 2022, and March 31, 2021, it had a negative net worth.
• The company's business is subject to seasonal fluctuations that can lead to revenue variations within a financial year.
• There are unresolved legal matters involving the company.
• The company is required to obtain, maintain, or renew necessary statutory and regulatory permits and approvals.
• The accuracy of the company's estimates and forward-looking statements may not be guaranteed.

 

 

IPO GMP Today

Latest GMP of Zaggle Prepaid Ocean Services IPO is Rs. 32. 

 

Conclusion

The Zaggle Prepaid Ocean Services IPO presents an opportunity for investors to participate in the expanding fintech sector. With a diverse product portfolio and a strong client base, the company has notable strengths. However, it's worth noting that the offering appears to be priced at a premium, and the company has a history of negative cash flows. Therefore, it is recommended that investors thoroughly assess all aspects before considering an investment in this IPO.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP

 

 

Thank You for reading this blog.
Hope you loved the IPO analysis.
Please Comment Below with your feedback because Your feedback motivates us to deliver more such content.

 

Follow MUKUL AGRAWAL for the latest IPO news and reviews. You can connect with us on social media platforms like Twitter, Facebook, and Instagram. You can also subscribe to our YouTube Channel for the latest videos of the stock market.