Zaggle Prepaid Stock Drops 3% Amid QIP News and Strategic Plans

Zaggle Prepaid’s stock took a sharp hit today, dropping over 3% in early trading on December 12. Why? A CNBC-TV18 report hinted that the company might go for a share placement within the next two weeks—and at a discount. This could lead to an equity dilution of around 15-16%.

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The placement, a Qualified Institutional Placement (QIP), is likely to be priced at ₹500-520 per share.

Zaggle’s board has already given the green light for a ₹950 crore fundraising plan. The goal? To fuel inorganic growth and make key strategic investments.

During the company’s September quarter earnings call, Avinash Godkhindi, Zaggle’s Managing Director and CEO, shed some light on this move. He said, "The idea is to keep this enabling provision ready, so we can act on opportunities when they come up—whether that’s for organic growth, expanding internationally, or acquiring new businesses. It’s hard to say exactly how the funds will be used, but this is the big-picture plan."

Zaggle’s leadership will also be busy meeting investors and analysts soon—they’re scheduled to join the Nirmal Bang Virtual IT Sector Conference on December 16.

Now, a quick look at the company’s impressive growth: With a market cap of over ₹6,700 crore, Zaggle’s share price have skyrocketed by 155% in 2024 alone. Since its debut on the stock market in September 2023, the stock has gained two-and-a-half times its original value. Want more details? Check out their September quarter earnings for a deeper dive.

This week, Zaggle also announced a new partnership with HDFC Bank. The plan? Offering HDFC credit cards integrated with Zaggle’s software solutions to corporate clients across different industries.

The company is also eyeing international markets to build on its domestic success. The US, in particular, is shaping up to be a priority for expansion. During the latest earnings call, Raj Narayanam, Zaggle’s founder and executive chairman, said, "We see specific opportunities in the US that can make entering the market smoother and growth faster. There’s strong demand for our type of products there."

One standout product, Zaggle International Payments (ZIP), is positioned to capitalize on the growing demand for forex and remittance solutions—fueled by increasing business and leisure travel abroad.

Looking at the bigger picture, the global spend management market is forecasted to grow by 10.2% annually. Back home, India’s market is expected to grow even faster, with a compound annual growth rate (CAGR) of 15.5%.