Zaggle Prepaid shares: Should you hold or exit the stock after flat D-St debut?

Shares of Zaggle Prepaid Ocean Services were listed on muted note on Friday but the stock found some buyers post listing and edged higher as the session progressed. The stock was listed at par, that means on its, at the National Stock Exchange at Rs 164. The stock was listed at a marginal discount of a per cent to Rs 162 on BSE.

The stock dropped to Rs 156.30 on its maiden trading session and found some buyers to rise 13 per cent to Rs 176 during the session. The stock was about 9 per cent above its listing price and 7 per cent up from its issue price. None-the-less, the stock remained in a tight range of Rs 20, gyrated between Rs 156-176.

The stock movement has left investors wondering if they should hold the stock or exit the counter after a tepid listing and range-bound trade. Majority of the market analysts suggest investors to book profits in the company and exit the counter. They suggest investors seek better opportunities outside.

Zaggle Prepaid made its debut on the stock markets today by listing at Rs 164 per share, exactly a flat listing considering its issue price of Rs 164, saod Shivani Nyati, Head of Wealth at Swastika Investmart

"Zaggle is a uniquely positioned player in the fintech industry, but it has a major dependency on third parties and has faced negative cash flow and a decline in its profitability in recent years. The IPO valuation was also high. Investors should exit their positions, but those who want to hold for some gain should maintain a stop loss at Rs 148," she suggested.

The Rs 563.38 crore IPO of Zaggle Prepaid Ocean Services was sold in the range of Rs 156-164 per share. The issue was open for bidding between September 14 to September 18. Investors could make a bid of a minimum of 90 equity shares. The issue of Zaggle Prepaid Ocean Services was overall subscribed 12.86 times during the three-day bidding process.

As expected, shares of Zaggle Prepaid Ocean Services listed at par on the bourses Although the company operates in a niche market that offers a combined solution for spend management and employee management, said Shreyansh Shah, Research Analyst at StoxBox. He believes that the IPO is aggressively priced.

The fintech industry is highly competitive, which may affect the company's earnings prospects, he added. "We advise investors, receiving allotment in the IPO, to sell their shares and consider other avenues for investment. However, market participants can reassess the company on improvement in its financial metrics over a sustained period."

Zaggle Prepaid Ocean Services provides fintech products and services to manage corporate business expenses through automated and innovative workflows. It had seven offices across India with over 1,750 customers, and more than 1.7 million users as of FY23.


Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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