Zaggle Prepaid Ocean Services IPO: Retail Portion Fully Subscribed 1.9x; What GMP Hints For Listing?

Zaggle Prepaid Ocean Services IPO: The fintech's Rs 563.4 crore initial public offering (IPO) received a 43% subscription against the total size on the second day of the issue. However, the retail portion fully subscribed and emerged as the driving force for the IPO. While demand from HNIs picked up, however, qualified institutional investors continued to show a tepid response. The last day for subscription is on September 18.

As per the data on NSE, the IPO received cumulative bids of 82,96,560 equity shares, subscribing 43% of the offered size of 1,93,26,761 equity shares. The retail portion is oversubscribed by 1.90 times the allocated shares to the category, while non-institutional investors subscribed 29% of the reserved portion. However, qualified institutional buyers showed dull bidding for the IPO.

Of the total IPO size, 75% of the shares are reserved for QIBs, while 15% is for NIIs, and the rest of the 10% is kept for RIIs.

The IPO is not available for trading on September 16 and 17 due to the weekend holidays, and hence, the last day for subscriptions is scheduled on September 18. The IPO opened on September 14th.

On Saturday, the grey market premium (GMP) of the IPO was Rs 16 per share. As per TopShareBrokers, with a price band of 164.00, Zaggle Prepaid Ocean Services IPO's estimated listing price is ₹180 (cap price + today's GMP). The expected percentage gain/loss per share is 9.76%.

The IPO comprised Rs 392 crore worth of fresh issue of equity shares and offer for sale (OFS) aggregating to Rs 171.4 crore. The price band of the IPO is fixed at Rs 156 apiece to Rs 164 having a face value of Re 1 each. The bid lot size is 90 Equity Shares and in multiples thereof.

Zaggle plans to utilise the proceeds of the fresh issue for customer acquisition and retention, technology and product development (Rs 40 crore) from FY24 to FY26, and debt repayment (Rs 17.1 crore). The remaining funds will be allocated for general corporate purposes.

Book-running lead managers for the IPO were -- ICICI Securities, Equirus Capital, IIFL Securities, and JM Financial. While KFin Technologies is the registrar.

Post the IPO, the allotment of basis shares will be carried on September 22, while refunds are expected to be initiated on September 25, followed by credit of shares in demat accounts on September 26. As per Chittorgarh, the IPO is likely to be listed on September 27.

Founded in 2011, the company is among a small number of uniquely positioned players with a diversified offering of fintech products and services, having one of the largest number of issued prepaid cards in India in partnership with certain of our banking partners (which constituted approximately 16.0% of India's total prepaid transaction volume, as of March 31, 2023), a diversified portfolio of SaaS, including tax and payroll software, and a wide touchpoint reach.