Zaggle IPO opens for subscription, GMP up 12%; should you subscribe to the issue-

Zaggle IPO opens for subscription, GMP up 12%; should you subscribe to the issue?

Zaggle Prepaid Ocean Services IPO: Zaggle Prepaid Ocean Services IPO opens for public subscription on Thursday, September 14, 2023 and will close on Monday, September 18, 2023. The bidding for anchor investors concluded on Wednesday, wherein the company collected Rs 253.52 crore. The price band for its public issue at Rs 156-164 per equity share of face value Rs 1 each. At the upper end of the price band, the company’s promoters and shareholders seek to raise Rs 563.38 crore from the IPO. Ahead of the public issue, Zaggle Hotels GMP rose 12% per equity share.

The IPO comprises a fresh issue of 23,902,439 shares, aggregating up to Rs 392 crore and an offer-for-Sale (OFS), with promoters offloading 10,449,816 shares, aggregating up to Rs 171.38 crore. The lot size of the Zaggle Prepaid Ocean Services IPO is 90 shares. The company intends to use the net proceeds from the IPO for expenditures towards customer acquisition and retention, the development of technology and products, the repayment or prepayment of certain borrowings, in full or in part, availed by the company, and general corporate purposes.

Should you apply for the Zaggle Prepaid Ocean Services IPO?Geojit: Subscribe

“At the upper price band of Rs 164, ZPOSL is available at a Adj. P/E of 54.3x (FY23), which appears to be aggressively priced. However, several factors contribute to its appeal, including a diverse client base spanning various industries, consistent revenue growth over the years, the company’s expansion strategies, a diversified revenue model, and the flourishing digital payments sector. Given these considerations, we recommend a ‘Subscribe’ rating for the issue on a short- to medium-term basis.”

Stoxbox: Avoid

“The company demonstrated growth at a CAGR of approximately 51.9% during the three years between FY2021 and FY2023, driven by increased usage of digital modes of payment during this period in India. If we attribute FY23 earnings to the post-IPO fully diluted paid-up equity capital of the company, the asking price is at a P/E of 66.7 and we believe it to be priced aggressively. We, therefore, recommend an ‘Avoid’ rating for the issue. However, we would reassess the company on improvement in financial metrics over a sustained period.”

(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)