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20 October 2023

Yatra Online IPO: Navigating the World of Travel and Technology

Introduction:

Yatra Online Limited, established in 2005, is a prominent player in the travel and technology sector. The company recently embarked on an Initial Public Offering (IPO) journey, seeking to raise funds for its growth and expansion plans.

IPO Highlights:

The Yatra Online IPO was valued at Rs 775.00 crores, comprising a fresh issue of 4.24 crore shares, amounting to Rs 602.00 crores, and an offer for sale of 1.22 crore shares, aggregating to Rs 173.00 crores. The IPO bidding window was open from September 15, 2023, to September 20, 2023, with allotments finalized on September 25, 2023. Yatra Online shares made their debut on both BSE and NSE on September 28, 2023. The IPO price band was set at ₹135 to ₹142 per share, with a minimum lot size of 105 shares, requiring a minimum investment of ₹14,910 for retail investors.

Key Market Players:

SBI Capital Markets Limited, Dam Capital Advisors Ltd (formerly Idfc Securities Ltd), and Iifl Securities Ltd served as the book running lead managers of the Yatra Online IPO. Link Intime India Private Ltd acted as the registrar for the issue.

Stock Performance:

As of October 6, 2023, Yatra Online Limited's stock was trading at ₹138.00, marking a modest 0.88% increase. The stock opened at ₹137.05, reached a high of ₹139.55, and dipped to a low of ₹134.50. The previous closing price was ₹136.80, with a total traded value of 7,49,035 shares.

Ownership Structure:

Pre-issue, the shareholding was at 98.59%, which subsequently decreased to 64.46% post-issue, reflecting adjustments in the company's equity structure.

Financial Insights:

As of March 31, 2023, Yatra Online demonstrated strong financial performance. The company's assets stood at ₹681.25 crores, driven by substantial revenue of ₹397.47 crores. This represented significant growth compared to previous years. After experiencing losses in previous years, the company reported a profit after tax of ₹7.63 crores. The net worth increased to ₹169.52 crores, with reserves and surplus indicating ₹153.07 crores. The total borrowing amounted to ₹13.11 crores.

Performance Indicators:

Key performance indicators for the Unihealth Consultancy IPO included a P/E (Price-to-Earnings) ratio of 26.56 and a Market Capitalization of ₹203.28 crores.

Market Indicators:

Key performance indicators included a Market Capitalization of ₹2228.21 crores, a Price-to-Earnings (P/E) ratio of 205.8, and a Return on Equity (ROE) of 18.1%.

Objectives of the Issue:

The net proceeds from the IPO were intended for several purposes, including:

1. Strategic investments, acquisitions, and inorganic growth.
2. Investment in customer acquisition and retention, technology, and other organic growth initiatives.
3. General corporate purposes.

Expert Opinion:

Highlighted that despite being one of the largest corporate travel service providers, Yatra Online posted dismal financial performance until FY22. However, based on its improved FY23 earnings, the issue seemed exorbitantly priced. Concerns were raised due to the company's high attrition rates during reported periods. Investors were advised to exercise caution when considering this expensive investment.

Subscription Status:

The Yatra Online IPO garnered substantial interest from investors, with an overall subscription rate of 1.66 times as of September 20, 2023. Retail investors exhibited significant enthusiasm, with a subscription rate of 2.19 times, while the Non-Institutional Investors (NII) category had a subscription rate of 0.43 times.

Conclusion:

Yatra Online Limited's IPO signifies its journey into the public market, showcasing its position in the travel and technology sector. Prospective investors should meticulously assess the company's financial health, growth prospects, and competitive landscape before making investment decisions. As with any investment, thorough research and diversification are essential strategies for navigating the dynamic world of IPOs.

Read More IPO related blogs - Unihealth Consultancy IPO