Zaggle Prepaid Ocean Services raises Rs 73 crore via private placement ahead of IPO launch

Zaggle, which has been profitable for the last three financial years mentioned in the draft papers, will utilise fresh issue proceeds for expenditure amounting to Rs 300 crore

FinTech-SaaS company Zaggle Prepaid Ocean Services has raised Rs 73 crore via private placement ahead of its initial public offering launch.

The company in a notice to investors on August 18 said in consultation with merchant bankers, it has undertaken the pre-IPO placement of 44.51 lakh equity shares, at an issue price of Rs 164 per share.

The financial technology products and services provider received approval from the board of directors for the pre-IPO placement on August 10, while the shareholders approved the same on August 11.

Further, as per the resolution passed by the board on August 16, the Saas firm has allocated 44.51 lakh shares to six investors, including 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.

Among them, Ashish Kacholia and Bengal Finance & Investment are the biggest investors, who bought Rs 30 crore shares each in the Zaggle Prepaid Ocean Services ahead of IPO.

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Zaggle, a leading player in spend management with a differentiated value proposition and diversified user base, has already received approval from the capital markets regulator Sebi in April to go ahead with IPO plans.

The company is planning to mop up around Rs 663 crore via maiden public issue. The IPO fundraising amount is calculated on the basis of Rs 164 per share.

The IPO comprises a fresh issuance of shares worth Rs 490 crore, and an offer for sale (OFS) of 1.05 crore equity shares by promoters and investors. The fresh issue size, as the company said in its prospectus, is expected to be reduced by Rs 73 crore to Rs 417 crore from Rs 490 crore currently.

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 590 crore.

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Promoters Raj P Narayanam, and Avinash Ramesh Godkhindi, who hold 61.66 percent shareholding in the company, will sell 15.3 lakh shares each via the OFS route, while Zuzu Software Services, the largest public shareholder in the company with an 18.95 percent stake will offload 17.65 lakh shares in the OFS.

VenturEast Proactive Fund LLC and GKFF Ventures are the largest selling shareholders in the IPO, offloading 28.3 lakh shares and 20.46 lakh shares respectively. Other selling shareholders are VenturEast SEDCO Proactive Fund LLC, Ventureast Trustee Company, Koteswara Rao Meduri and Malvika Poddar.

Zaggle, which has been profitable for the last three financial years mentioned in the draft papers, will utilise fresh issue proceeds 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.

The Saas firm with strong margin performance is among a small number of uniquely positioned players with a diversified offering of financial technology products and services.

Merchant bankers to the issue are ICICI Securities, Equirus Capital, IIFL Securities, and JM Financial, while KFin Technologies is the registrar of the offer.