In this article, we will talk about the public issue of RateGain Travel Technologies – a travel tech start-up based in Noida.
RateGain Travel Technologies’ three-day IPO will open for subscription on December 7. The software-as-a-service (SaaS) company plans to list on exchanges on December 17.
The company’s anchor book is expected to open for one day on 6 December 2021.
The company has fixed the price band of 405-425 per equity share for public offering. At the upper end of the price band, the issue will bring the company 13.4 billion
Kotak Mahindra Capital Company, IIFL Securities, and Nomura Financial Advisory & Securities (India) are the book running lead managers to the issue.
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Promoter’s stake in the company
Bhanu Chopra and Megha Chopra are the promoters of the company.
Promoters hold 67.29% stake in the company and the remaining shares are held by public shareholders including Wagner and Avtar.
Investor Wagner will sell 17.1 million equity shares through offer for sale (OFS), while promoters Bhanu Chopra, Megha Chopra and Usha Chopra will sell 5.5 million equity shares.
Category wise Reserved Part
Up to 75% of the net issue is reserved for Qualified Institutional Buyers (QIBs), while non-institutional buyers will have 15% of the shares allotted to them.
The retail share is fixed at 10% of the net offering. Retail investors can invest as little as 14,875 for one lot, and their maximum investment would be 193,375 for 13 lots.
The company has also allotted equity shares of value 50m more for its eligible employees 40 per share for eligible employees bidding in the share reserved for them.
net income use
According to the Red Herring Prospectus (RHP), RateGain will now use 852.6m to repay loan taken by RateGain UK from Silicon Valley Bank. In DRHP, this expenditure was calculated as 864 m
In addition, the company will use 252m income in deferred consideration for DISCO acquisition from 2018. this idea was there before 262 m
Will also look to invest 800m towards strategic investment, acquisition and inorganic development and 500m for technology innovation, artificial intelligence (AI), and other organic growth initiatives.
Earlier, the company had proposed to allot 433m for purchase of some capital equipment for your data center and this proposed expenditure has now been reduced 407.7 m
A brief about the company
RateGain Travel Technologies is one of the leading distribution technology companies globally and the largest software as a service provider in the travel and hospitality industry in India.
The firm provides travel and hospitality services across various verticals such as hotels, airlines, online travel agents, meta-search companies, package providers, car rental, cruise and ferries.
The business provides inter-connected products to manage the revenue generation value chain while leveraging big data capabilities and integrations and has expanded product portfolio to AI and machine learning capabilities during this period.
RateGain Travel provides travel and hospitality technology solutions through 3 business units through the SaaS platform.
1. Data as a Service (DaaS)
2. Distribution
3. Marketing Technology (Martek)
RateGain Travel Technologies’ Customer Base
As of 30 June 2021, it had over 1,400 customers, including eight global Fortune 500 companies.
Its clients include Six Continents Hotels, Intercontinental Hotels Group firm, luxury hotel chain Kessler Collection, Lemon Tree Hotels and OYO Hotels & Homes Pvt Ltd.
This includes 1,186 large and medium-sized hotel chains, 104 travel partners, such as airlines, car rental and cruise companies, and over 144 distribution partners such as online travel agencies (OTAs) such as GroupOn and distribution companies such as Saber GLBL Inc. fulfills. Customers in over 110 countries.
Quick look at the company’s financial position
The company posted a consolidated loss of 285.7m in FY 2021, against loss Last year 201 m. Revenue declined in the same year to 2.5 billion 4 billion
In the five-month period ending August 2021, the deficit was 83.3m against loss of 78.5 m in the corresponding period of last financial year.
However, revenue from operations increased 1.3 billion during the same period, from 978.9 m year on year (YoY).
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The COVID-19 pandemic has adversely affected the Company’s business, financial position and results of operations.
According to Travel Tech’s prospectus, disruptions to the operations of the firm’s clients and potential clients, including travel restrictions and business closures, uncertainty in financial markets or other damage to their business and financial performance, have led to the loss of information. Technology budgeting, delayed purchase decisions, long sales cycles, extended payment terms, payment schedules, the ability to pay for services and solutions on time or at all, and postponed or canceled projects, all affected the company’s business and operating results. negatively affected. Including sales and cash flow.
competitive strength
Strong customer base with 1,434 clients including 8 Global Fortune 500 companies as of 30 June 2021.
Provider of innovative AI-powered industry-relevant SaaS solutions.
Comprehensive product portfolio solutions for the travel and hospitality industry.
Strong financial performance with an established track record of successful acceleration post acquisition.
Diversified management team with domain expertise.
RateGain Travel Technologies IPO Risks
The COVID-19 pandemic had a significant negative impact on his company and operational performance, and its future impact is unknown.
The activities of a small number of markets account for a large percentage of their revenue.
They may not realize the expected benefits from their strategic investments and acquisitions, and they may fail to pursue future investments and acquisitions.
They may face new problems and threats as they expand into new business areas or product lines.
They have a history of net losses and expect their costs to increase in the future.
Failure to provide excellent customer service and support can have a negative impact on their existing customer relationships.
Exchange rate changes can negatively affect the results of their operations.
Failure to protect their intellectual property rights can have a negative impact on their business and brand.
Tourism may go off track as travel firms prepare for O’Micron impact
The spread of the new version of the Covid-19 virus could stall the tourism sector’s recovery.
The World Health Organization (WHO) has termed the first-ever oomicron mutation detected in South Africa as a ‘type of concern’ that poses a very high global risk.
Many players in the travel sector are worried about cancellations in the coming days as countries tighten travel restrictions.
This could adversely impact the business operations of RateGain Travel Technologies and its clients in the coming months.
The Indian tourism industry, which is hoping for a revival after being badly hit for almost two years, is on a wait-and-watch mode over the impact of the new COVID variant, Omicron, on the sector.
The IPO market in India is booming. Will the trend continue?
After the recent market correction, market participants should keep an eye on the Indian and global markets as the new corona version has hit the global markets very badly.
This can also have an impact on the primary market.
However, given the abundant liquidity and easing of listing procedures by the market regulator, the IPO craze is understandable.
Statistics show that companies raised US$4.6 billion in IPOs last year. The market believes that this amount will be easily exceeded in 2021.
As companies line up to raise funds from the market amid high valuations, investors need to consider several factors before investing their money in an IPO.
If you are investing in an IPO, take into account all the positive and negative factors affecting the company.
Take a closer look at the company’s financials and valuation. This will give you a clear picture of what is cooking.
Happy investment!
(This article is syndicated from) Equitymaster.com,
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