Zaggle Prepaid lining Rs 950 crore QIP in two weeks to fund expansion

The board of Zaggle has already secured an approval for a Rs 950 crore fund raise. This funding is for inorganic growth and strategic investments.

Shares of Zaggle Prepaid were sharply lower over 3% in early trade on December 12 after CNBC-TV18 reported that the share placement may take place in the next two weeks, at a discount, and the company may see an equity dilution of 15-16%.

The Qualified Institutional Placement (QIP) of shares is expected to happen at Rs 500-520 per share.

The board of Zaggle has already secured an approval for a Rs 950 crore fund raise. This funding is for inorganic growth and strategic investments.

"The whole idea is to be able to have this enabling provision with us so that we are ready to be able to tap into any opportunities that we come across from time to time, both for organic growth, international expansion as well as inorganic growth. Difficult to say at this moment how much would the split be, but broadly that is the commentary that we can give you," Avinash Godkhindi, MD and CEO, Zaggle Prepaid said during the September quarter earnings call.

The management is meeting investors and analysts at the Nirmal Bang Virtual IT Sector Conference on December 16.

The company has a market capitalisation of over Rs 6,700 crore and the shares are higher by 155% so far in 2024. Since its listing in September 2023, the shares have grown by 2-1/2 times. Track Zaggle's September quarter earnings here.

Earlier this week, the company announced an arrangement to offer HDFC credit cards bundled with Zaggle Software to its corporate customers across industries.

The company has been working on expanding internationally to leverage its success in the domestic market. The US market remains a key opportunity for Zaggle due to its vast potential, the management has said. "There are particular segments and segues which could possibly provide us an easier landing and faster expanding. We also see that there is a strong customer demand in the US for products like ours," said Raj Narayanam, founder and executive chairman of Zaggle, during the recent earnings call. One of its products Zaggle International Payments (ZIP) focuses on forex and remittances, which the company sees as a 'significant' opportunity to tap into a growing market of overseas travel for business as well as leisure.

The global spend management market is growing at a rate of 10.2% annually, and the Indian market is estimated to expand at a CAGR of 15.5%.