Zaggle Prepaid Ocean Services Pvt. Ltd IPO

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Zaggle is a leading player in spend management, with a differentiated value proposition and diversified user base.

They are sector-agnostic, and network of corporate customers (“Customers”) covers the banking and finance, technology, healthcare, manufacturing, FMCG, infrastructure and automobile industries, among others, where they have relationships with brands such as TATA Steel, Persistent Systems, Vitech, Inox, Pitney Bowes, Wockhardt, MAZDA, PCBL (RP – Sanjiv Goenka Group), Hiranandani group, Cotiviti and Greenply Industries.

Their SaaS platform is designed for:

(i) business spend management (including expense management and vendor management)
(ii) rewards and incentives management for employees and channel partners
(iii) a gift card management for merchants

Their core product portfolio include:

• ‘Propel’, a corporate SaaS platform for channel rewards and incentives, employee rewards and recognition
• ‘Save’, a SaaS-based platform and a mobile application to offer expense management solution for business spend management facilitating digitised employee reimbursements and tax benefits
• ‘CEMS’, a customer engagement management system that enables merchants to comprehensively manage their customer experiences including rewarding merchants through gift card and loyalty benefits
• ‘Zaggle Payroll Card’, a prepaid payroll card that allows our Customers to pay contractors, consultants, seasonal and temporary employees, and unbanked wage workers as an alternative to direct deposits to bank accounts or cash payments
• ‘Zoyer’, an integrated data driven, SaaS based business spend management platform with embedded automated finance capabilities in core invoice to pay workflows.

Risk Factors

(i) Their recent revenue growth rates may not be indicative of future financial performance. They have limited operating history at current scale. Failure to effectively manage growth could materially and adversely affect the success of business and/or impact their margins.

(ii) Laws and regulations governing business and operations may continue to change and evolve and the introduction of new laws and regulations applicable to business may adversely affect financial condition, results of operations and profitability.

(iii) They may be unable to retain existing Customers, attract new Customers, convert Customers using beta or trial versions into paying Customers, or expand usage of products within or across Customer organisations.

(iv) They are dependent on third-party payment networks to operate prepaid card business

(v) The Company does not have any listed industry peers in India or abroad.

Objects of the Zaggle Prepaid Ocean Services Pvt. Ltd IPO:

The Offer comprises the Fresh Issue and the Offer for Sale.  Offer for Sale The Selling Shareholders, i.e., Raj P Narayanam, Avinash Ramesh Godkhindi, VenturEast Proactive Fund LLC, VenturEast SEDCO Proactive Fund LLC, Ventureast Trustee Company Private Limited (acting on behalf of Ventureast Proactive Fund), GKFF Ventures, Zuzu Software Services Private Limited, Koteswara Rao Meduri and Malvika Poddar will be entitled to their respective portion of the proceeds of the Offer for Sale after deducting their respective proportion of Offer expenses and relevant taxes thereon.  Fresh Issue Fresh Issue of the company is Rs 490 Cr.  The Company proposes to utilise the Net Proceeds towards funding of the following objects: 1.Expenditure towards Customer acquisition and retention 2. Expenditure towards development of technology and product. 3. Repayment/ prepayment of certain borrowings, in full or part, availed by our Company 4. General corporate purposes.

Zaggle Prepaid Ocean Services Pvt. Ltd IPO Details:

Listing At: NSE,BSE

Promoters And Management:

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.  

Financials of Zaggle Prepaid Ocean Services Pvt. Ltd IPO:

Particulars ( In Crore ) 2022 2021 2020
Revenue from Operations 371 240 68
Total Revenue 371 240 68
Cost of Point Redemption / Gift Cards 143 29 6
Consumption of Cards 1.7 1.5 3.0
Employee Benefits Expense 15 12 10
Other Expenses 150 169 38
EBITDA 60 28 11
Depreciation & Amortisation 2 2 2
Finance Cost 7 8 4
EBIT 58 26 9
OPM (%) 16.17% 11.67% 16.18%
PBT 51 18 5
PAT 42 19 4
NPM (%) 11.32% 7.92% 5.88%
No.of Shares 9.2 9.2 9.2
EPS 4.57 2.07 0.43

Comparison With Peers:

To be updated shortly.

Recommendation on Zaggle Prepaid Ocean Services Pvt. Ltd IPO:

To be updated once for Zaggle Prepaid Ocean Services files for RHP.

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