Zaggle Prepaid Ocean Services, a leading fintech-SaaS company, is all set to kick off its IPO on September 14 with the goal of raising approximately Rs 563 crore. This comprehensive IPO includes a fresh issue of shares worth Rs 392 crore, as well as an offer for sale (OFS) of 1,04,49,816 equity shares from eight selling shareholders. Prominent among them are Raj P Narayanam and Avinash Ramesh Godkhindi, who are the company’s promoters. The other stakeholders participating in the OFS include VentureEast Proactive Fund LLC, GKFF Ventures, VentureEast Sedco Proactive Fund LLC, VentureEast Trustee Company, Zuzu Software Services, and Koteswara Rao Meduri.
Targeting Rs 563 Crore in Fundraising
If we consider an offer price of Rs 164 per share, the total issue size would amount to Rs 563.38 crore (comprising Rs 392 crore from the fresh issue and Rs 171.38 crore from the OFS). It’s worth noting that the company conducted a pre-IPO placement in August 2023 at this price.
In August 2023, this financial technology products and services provider executed a pre-IPO placement of 59.75 lakh equity shares at Rs 164 per share, aggregating to Rs 98 crore. The most significant investors in this placement were Ashish Rameshchandra Kacholia and Bengal Finance and Investment, who acquired a 1.86 percent stake through private placement.
As a result of this placement, the size of the fresh issue has been reduced by Rs 98 crore, now standing at Rs 392 crore.
Insights into Zaggle’s Financial Strategy
The IPO has allocated 75 percent of its issue size to qualified institutional buyers, with 60 percent of this allocation available to anchor investors. Additionally, 15 percent and 10 percent of the IPO shares have been reserved for high net worth individuals and retail investors, respectively.
The anchor book for this IPO will open for one day on September 13, while the offering period will conclude on September 18.
Zaggle intends to utilize the Rs 300 crore raised to fund customer acquisition and retention over the three financial years spanning FY24 to FY26. Furthermore, Rs 40 crore will be directed towards the development of technology and products. A portion of the fresh issue proceeds, amounting to Rs 17.08 crore, will be allocated for debt repayment, with the remaining funds earmarked for general corporate purposes.
As of March 2023, the company’s total outstanding borrowings stood at Rs 90.03 crore.
ICICI Securities, Equirus Capital, IIFL Securities, and JM Financial are serving as the merchant bankers for this IPO, while KFin Technologies has been appointed as the registrar.
