Stock in focus: Zaggle Prepaid share price surges 200% since IPO; Check out four factors driving this new-age tech stock

Stock in focus: Zaggle Prepaid share price has witnessed an impressive surge, jumping nearly 200% from its IPO price of ₹164 since its listing on September 22, 2023. This remarkable growth has delivered substantial multibagger returns for investors within just 14 months. 

In comparison to some other new-age companies, Zaggle stands out in terms of investor returns. For instance, while PB Fintech (Policybazaar) has provided returns exceeding 70% over its IPO price, companies like One 97 Communications (Paytm), Fino Payments Bank, and Infibeam Avenues have faced declines in their share prices. 

According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, the overall trend for Zaggle remains positive, with any minor dip getting bought into. Strong support is seen around ₹440, whereas the next resistance is around ₹520, said Bhosale.

Over the past month, Zaggle Prepaid share price has been an outperformer with a 15.33% rise. This performance is notably stronger compared to the BSE Information Technology index, which has experienced a growth of 3.32%, and the Sensex, which is up by just 1.07%.

As per experts, Zaggle’s strong performance can be attributed to several key factors:

1. Major Client Acquisitions

Zaggle has made significant strides in expanding its client base, said analysts. It has onboarded two major clients: Mumbai Metro One and Strada India Private Limited. This highlights the company's growing influence in the market and commitment to delivering innovative financial solutions.

2. Robust Financial Growth

The company reported a consolidated profit growth of 145% year-on-year (YoY) for Q2 FY25, reaching ₹18.6 crore, up from ₹7.6 crore in Q2 FY24, boosting investor confidence in the new-age stock.

3. Expansion Plans

Zaggle’s board has approved a substantial capital raise of ₹950 crore to fuel its growth initiatives. This funding, according to experts, is expected to bolster the company’s strategic plans and expand its operations, enabling it to explore new market opportunities and enhance its product offerings.

4. Strategic Acquisitions

In September, Zaggle acquired a 98% stake in Span Across IT Solutions Pvt Ltd for approximately ₹32 crore and a 26% stake in Technologies for ₹15.6 crore. These acquisitions are part of Zaggle's strategy to strengthen its portfolio and enhance its capabilities in the technology sector, said analysts.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.