RateGain Travel Technologies’ initial public offering (IPO) has begun

The initial public offering (IPO) of travel and hospitality solutions provider RateGain Travel Technologies was subscribed 29 percent in the first few hours of the issue’s debut on December 7.

Out of a total of 1.73 crore units available in the IPO, investors bid for 50.23 lakh equity shares. The portion intended for regular investors was completely sold out, whereas the portion reserved for employees only garnered a 6% subscription.

The offer size was cut from 3.18 crore equity shares to 1.73 crore equity shares after anchor investors contributed Rs 598.83 crore.

Non-institutional investors and qualifying institutional buyers might still participate in the offer.

The issuance aims to generate Rs 1,335.7 crore for RateGain, the hospitality and travel industry’s largest software as a service (SaaS) provider.
A Rs 375 crore new issuance and a 2.26 crore share offer-for-sale make up the IPO.

Employees of the company would receive shares at a discount of Rs 40 off the final issue price thanks to a Rs 5 crore share reservation. The price range for the offer is Rs 405-425 per share.

Debt repayment, payment of deferred consideration for the acquisition of DHISCO, strategic investments, technology innovation, artificial intelligence, and other organic growth efforts, as well as the purchase of data centre capital equipment, are among the issue’s key objectives.

“The issue is valued at 17.3x and 18.1x of FY21 sales, respectively, given the price band of Rs 405-425,” according to KR Choksey Research.

According to the brokerage, once limitations are relaxed and the travel industry returns to normal, the company’s business will improve. As a result, it assigned a “subscribe” rating to the IPO.

The company has maintained a focus on capital efficiency and has grown in a conservative manner by operating with low debt to stay in a favourable position during the COVID-19 crisis.

However, the company lost Rs 28.57 crore in FY21 and Rs 8.34 crore in the first five months of FY22, with negative EPS of Rs 3.1 and Rs 0.9, respectively.

“We believe that the company’s future growth potential will be enhanced by the use of AI (artificial intelligence) and ML (machine learning) in the travel sector, as well as the chance to create a better customer experience,” said KRChoksey.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button