Zaggle Prepaid Ocean Services raises Rs 25 cr from ValueQuest, ahead of IPO

Zaggle Prepaid Ocean Services raises Rs 25 crore from ValueQuest

Software-as-a-service (SaaS) fintech Zaggle Prepaid Ocean Services has mopped up Rs 25 crore from ValueQuest Scale Fund through a private placement.

This infusion from the ValueQuest Investment Advisors-managed fund is in addition to the Rs 73 crore raised by the company in a pre-IPO placement last week. It takes the total to Rs 98 crore.

The company, in consultation with merchant bankers, has undertaken the pre-IPO placement of 15,24,390 equity shares at a price of Rs 164 per unit, amounting to Rs 25 crore, Zaggle said in a notice to investors on August 22.

The financial technology products and services provider had last week allotted 44.51 lakh equity shares at the same price to six investors - Ashish Rameshchandra Kacholia, Bengal Finance and Investment, Himanshi Kela, Absolute Returns Scheme, Vikasa India EIF I Fund - Incube Global Opportunities and Acintyo Investment Fund PCC - Cell 1.

Armed with an approval for the IPO launch, Zaggle, a leading player in spend management with a differentiated value proposition and diversified user base, plans to raise around Rs 663 crore from the initial public offering. We have taken the current issue price of Rs 164 per share as a base for calculation of the total issue size.

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The offer comprises fresh issuance of shares worth Rs 490 crore, and an offer-for-sale (OFS) of 1,05,26,316 equity shares by promoters and investors.

If we consider the pre-IPO placement, the fresh issue size may be reduced to Rs 392 crore from Rs 490 crore. The company in its prospectus said the fresh issue size may be reduced to the extent of pre-IPO placement size.

If we assume the reduction in fresh issue size as per the company's plan, then the expected total offer size of Zaggle IPO could be around Rs 565 crore.

Also read: Aeroflex Industries IPO opens for booking. Should you subscribe to the issue?

Promoters Raj P Narayanam, Avinash Ramesh Godkhindi and Zuzu Software Services (the largest public shareholder in the company with an 18.95 percent stake), VenturEast Proactive Fund LLC, GKFF Ventures, VenturEast SEDCO Proactive Fund LLC, Ventureast Trustee Company, Koteswara Rao Meduri and Malvika Poddar are the selling shareholders in the OFS.

The fresh issue proceeds, excluding offer expenses, will be used mainly for expenditure amounting to Rs 300 crore towards customer acquisition and retention, development of technology and products (Rs 40 crore), and repaying debts of Rs 18 crore, said Zaggle, which has been profitable for the last three financial years. The remaining amount will be used for general corporate purposes.

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ICICI Securities, Equirus Capital, IIFL Securities, and JM Financial are the merchant bankers to the issue.