Zaggle Prepaid Ocean Services Limited started in 2011, they operate in a segment where they interact and interface with the Customers (i.e., businesses) and end Users (i.e., employees) and are 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 the banking partners (which constituted approximately 16.0% of Bharat'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 (Source: Frost & Sullivan Report). We are a leading player in spend management, with more than 50 million prepaid cards issued in partnership with banking partners and more than 2.27 million users served, as of March 31, 2023. Company is sector-agnostic, and the network of corporate customers covers the banking and finance, technology, healthcare, manufacturing, FMCG, infrastructure and automobile industries, among others, where they have relationships with brands such as TATA Steel, Persistent Systems, Vitech, Inox, Pitney Bowes, Wockhardt, MAZDA, PCBL (RP – Sanjiv Goenka Group), Hiranandani group, Cotiviti and Greenply Industries. Company is placed at the intersection of the SaaS and fintech ecosystems, and the SaaS platform is designed for: (i) business spend management (including expense management and vendor management); (ii) rewards and incentives management for employees and channel partners; and (iii) gift card management for merchants, which they refer to as customer engagement management system ('CEMS'). Company offers an ecosystem-based approach across SaaS and fintech, with low customer acquisition and retention costs in the business-to-business ('B2B') segment. The approach revolves around cross-selling, up-selling, and offering the products and services in partnership with other players in the operating ecosystems. Through the arrangements with partner banks and fintechs, the Customers are able to offer their employees, channel partners and consumers a suite of SaaS and fintech solutions. They offer an integrated value proposition through the SaaS platform, providing a combination of payment instruments as well as an integrated mobile application that digitises business and employee spends. Application programming interface ('API') integrations on the platforms provided to the Customers offer them enhanced convenience and an efficient user experience through a simplified dashboard. Accordingly, they have partnered with, and have entered into arrangements with, DBS Bank, Fibe (formerly, EarlySalary) and Tata Securities to offer their products and value-added services ('VAS'), including insurance, investment and tax planning, to the Users on the platform. As per financial performance, Zaggle Prepaid Ocean Services Limited has posted total income / net profits of Rs 240.29 Cr / Rs 19.33 Cr (FY21) and Rs 371.66 Cr / Rs 41.92 (FY22) and Rs 554.58 Cr / Rs 22.90 Cr (FY23). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 3.11 and average RoNW of (376.32)% for last three fiscals. Issue is priced at a P/BV of 31.00 as per NAV of 5.29 as on 31.03.23. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around 47.77 and as per FY23 earnings P/E is around 87.44, which looks aggressively priced. As per RHP, there is no peers. On BRLM's front, four lead managers are associated with this IPO, and have handled around 116 IPOs in last three fiscals. ICICI Securities Limited : This is 37th IPO from this BRLM. From last 10 IPOs, 3 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, all are trading above issue price or at par. (As on 12.09.2023) Equirus Capital Private Limited : This is 12th IPO from this BRLM. From last 10 IPOs, 2 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, one is trading below issue price and remaining above or at par of issue price. (As on 12.09.2023) IIFL Securities Ltd : This is 35th IPO from this BRLM. From last 10 IPOs, all are opened above issue price or at par on the day of listing. As of now, from last 10 IPOs, one is trading below issue price and remaining above or at par of issue price. (As on 12.09.2023) JM Financial Limited : This is 32nd IPO from this BRLM. From last 10 IPOs, 3 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, one is are trading below issue price and remaining above or at par of issue price. (As on 12.09.2023) As per financials, Zaggle Prepaid Ocean Services Limited has shown good growth, RoNW is 46.98% and P/E is respectively 47.77 and 87.77 as per FY22 and FY23 earnings. So, issue looks aggressively priced. Company is a fintech company, which is emerging segment. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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