Raj P Narayanam is the Executive Chairman of our Company. He has been on the Board of our Company since April 30, 2012. He completed post graduate diploma in business management with specialisation in finance from the FORE School of Management, New Delhi. He has also completed his post graduate diploma on “Computer Systems' ' from Advanced Computer Education and a certified online course on “Scaling a Business: How to Build a USD 1 Billion Unicorn” from The Wharton School, University of Pennsylvania. Avinash Ramesh Godkhindi is the Managing Director and Chief Executive officer of our Company. He has been on the Board of our Company since May 7, 2012. He holds a bachelors’ degree in engineering from Bangalore University, Bengaluru and a masters’ degree in business administration from the University of Chicago, Chicago. Arun Vijaykumar Gupta is a Non-Executive Director of our Company. He has been on the Board of our Company since September 26, 2022. He holds a bachelors’ degree in commerce from the P.D. Lion’s College of Commerce and Economics, University of Bombay.  

Note: - There is no listed companies related to this company.

Review and Recommendation of Zaggle Prepaid Ocean Services by IZ team is 5/10

A) Business Overview

Zaggle is a versatile player in the spend management sector, with a unique value proposition and a broad customer base that spans multiple industries like banking, technology, healthcare, and manufacturing, among others. Its SaaS platform is designed to facilitate multiple functionalities, including business spend management, rewards and incentives management, and gift card management for merchants.

B) Core Product Portfolio

The company's core products like 'Propel', 'Save', 'CEMS', 'Zaggle Payroll Card', and 'Zoyer' provide a comprehensive suite of solutions for corporate spend and rewards management. These platforms offer both standard and customized solutions that enable digitized employee reimbursements, customer engagement, and business spend management.

C) Risk Factors

Though Zaggle has shown promising growth, it is important to consider potential risks. The company has a limited operating history at its current scale, and its recent revenue growth may not be indicative of future performance. Regulatory changes, customer retention, and dependency on third-party payment networks are additional concerns.

D) Financials

The company's revenue from operations has been showing an upward trajectory, but it's critical to note that while the EBITDA seems to be positive, the operating profit margin (OPM) has shown a decrease in the most recent year. This could be indicative of increasing costs or competitive pressures affecting profitability.

E) Object of the Issue

Zaggle aims to raise Rs 490 Cr through its IPO, focusing on customer acquisition, technological development, debt repayment, and general corporate purposes. The fact that there are no listed peers in this segment makes Zaggle a unique but potentially risky investment.

F) Management

The management team, led by Raj P Narayanam and Avinash Ramesh Godkhindi, brings a diverse set of skills and extensive experience to the table, which could be a key asset for the company's growth and scaling efforts.

G) Revenue Model

Zaggle's revenue primarily comes from software subscriptions and commissions from banks when their issued cards are utilized. This dual revenue stream could offer a certain level of financial stability.

H) Valuation

The company is coming up with an IPO at a P/E ratio of 66x and a market capitalization of Rs 2000 Cr. At first glance, this valuation appears to be on the higher side, especially when considering the inherent risks and the current profit margins. High P/E ratios are generally indicative of high growth expectations from the market, but they also signal that the stock could be overvalued, posing a risk of downside correction. Given the absence of listed peers, it's challenging to make a direct comparative valuation.

I) Conclusion

In summary, Zaggle presents a compelling investment opportunity given its diversified product portfolio, multi-industry customer base, and strong management team. However, prospective investors should exercise caution due to the company's limited operating history, regulatory landscape, and the risks associated with customer retention and third-party dependencies. As with any investment, it's crucial to balance the high growth potential against the inherent risks. Plus valuation looks on higher side.