Yatra Online IPO To Open Today; Here's What Investors Should Know Before Subscribing

Travel services provider, Yatra Online is set to launch its Rs 750 crore worth initial public offer (IPO) on Friday. Subscriptions for the IPO will close on September 20, 2023. The IPO will be listed on BSE and NSE. Yatra Online is the country's largest corporate travel services provider in terms of a number of corporate clients and the third largest online travel company in India among OTA players in terms of gross booking revenue and operating revenue, for Fiscal Year 2023.

Here are the key pointers to note before subscribing to this IPO:

IPO size: The IPO is a mixture of a fresh issue worth Rs 602 crore and an offer for sale (OFS) of up to 12,183,099 equity shares. The company is looking to raise Rs 750 crore from the public offer.

Offer for sale: Promoters like THCL Travel Holding Cyprus and Pandara Trust-Scheme 1 Represented By Its trustee Vistara ITCL (India) will be participating in the offer for sale.

Investors Reserved Portions: Of the total IPO size, 75% will be reserved for qualified institutional buyers (QIBs), while 15% of the issue will be allocated to non-institutional investors (NIIs) and the rest of 10% will be kept for retail individual investors (RIIs).

Price bands: The IPO's price band is fixed at Rs 135 to Rs 142 per share having a face value of Re 1 each. The IPO is 100% book building. The bid lot size is 105 Equity Shares and in multiples thereof.

Anchor investors: Ahead of the IPO, on September 14, the company raised Rs 348.75 crore from 33 anchor investors including ICICI Prudential Mutual Fund, Mirae Asset, Tata Mutual Fund, Bandhan Mutual Fund, Morgan Stanley, Goldman Sachs, Societe Generale, BNP Paribas Arbitrage, Elara India Opportunities Fund, Whiteoak Capital, Quantum-State Investment Fund, Max Life Insurance Company, Bajaj Allianz Life Insurance Company, and Edelweiss Trusteeship.

Lead managers: Companies like SBI Capital Markets, DAM Capital Advisors, and IIFL Securities are the book-running lead managers (BLRM) of the issue, while Link Intime India is the registrar.

Proceeds: From Rs 602 crore fresh issue, up to Rs 150 crore of proceeds the company plans to utilise for strategic investments, acquisitions and inorganic growth. Further, about Rs 392 crore will be utilised for investment in customer acquisition and retention, technology, and other organic growth initiatives. Also, a portion of the issue will be used for general corporate purposes.

Post the closure of the IPO, the basis of allotment of equity shares is expected to be carried out on September 25, while refunds are likely to be initiated on September 26, and shares are expected to be credited in demat accounts by September 27. Accordingly, as per Chittorgarh's report, the company's shares will be listed on September 28, 2023.

In its note, Nirmal Bang highlighted that on the financial front, total income increased by 81.65% from Rs 2,188.10 million in Fiscal 2022 to Rs 3,974.65 million in Fiscal 2023. The company's restated profit during the year ended March 31, 2023, was Rs 76.32 million as compared to a restated loss of Rs 307.86 million in the year ended March 31, 2022. Meanwhile, it intends to grow its customer base by continuing to provide business and leisure travellers, with a seamless and integrated technology platform that meets all their travel needs. The company intends to continue to leverage its corporate and supplier relationships to offer more solutions to its corporate clients. By leveraging Yatra Online's robust relationship with air carriers, large corporate and SME customers it will be able to provide a technology-enabled digital freight forward platform which will cover ocean freight, surface logistics and air Cargo.

The company has the largest number of hotel and accommodation tie-ups amongst key domestic OTA players with over 2,105,600 tie-ups, as of March 31, 2023. Among key strategies as per the red herring prospectus, the company intends to grow its customer base by continuing to provide business and leisure travellers, with a seamless and integrated technology platform that meets all their travel needs. Further, the company plans to continue to use the eCash program as an incentive to drive repeat rates from its B2C customers and to incentivize B2B customers to transact with us on the B2C platform.

Yatra believes that its leadership position in corporate travel, integrated technology platform and speed to market in bringing customers on board gives them a distinct advantage over the competition. By leveraging Yatra Online's robust relationship with air carriers, and large corporate and SME customers, the company believes it will be able to provide a technology-enabled digital freight forward platform which will cover ocean freight, surface logistics and air Cargo.

Furthermore, the company expects to continue to pursue acquisitions that it believes will provide services, technologies or people that complement or expand their current offerings. Also, the company expects increased travel within and between Tier 2 and Tier 3 cities to drive growth in air and hotels, by leveraging its existing travel agent network in Tier II and Tier III cities.

The equity shares will be listed on BSE and NSE after the IPO.

Disclaimer

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