India’s travel industry is on the brink of a monumental shift as Yatra Online, the nation’s third-largest online travel company, gears up to launch its Initial Public Offering (IPO) on September 15. This event has been keenly awaited by investors and travel enthusiasts alike, as it promises to reshape the landscape of online travel booking in India.
The Core of Yatra Online’s IPO
Founded in 2005, Yatra Online is taking a significant step forward by making its shares available to the public. The IPO consists of newly issued shares worth Rs 602 crore and an offer for sale (OFS) of up to 12.2 million shares by a promoter and an existing investor. This move is expected to raise substantial capital for the company, enabling it to expand and solidify its position in the market.
Pricing and Unexpected Trends
What’s intriguing about Yatra Online’s IPO is its price band, set at Rs 135-142 per equity share. This range is notably lower than the price at which Yatra Online issued shares to one of its promoters in a pre-IPO placement just last year. In December 2022, the company raised Rs 62.01 crore through a rights issue, offering 2,627,697 equity shares to its promoter, THCL Travel Holding Cyprus, at an issue price of Rs 236 per share. This contrast in pricing strategies raises questions about Yatra Online’s valuation and its strategy to attract investors.
Subscription and Key Dates
Investors interested in participating in the Yatra IPO should be aware of the new cut-off time for UPI mandate acceptance: 05:00 PM on September 20, the final day of IPO bidding. The bidding process allows investors to bid for a minimum of 105 equity shares and in multiples of 105 equity shares thereafter. This structure accommodates a wide range of investors, from individuals to institutions.
How the Funds Will Be Used
Yatra Online has outlined a clear plan for the funds raised through the IPO. A substantial portion, Rs 150 crore, is earmarked for strategic investments, acquisitions, and inorganic growth. This suggests Yatra’s ambition to expand its market presence and explore new business avenues. Another significant allocation, Rs 392 crore, is dedicated to investment in customer acquisition and retention, technology upgrades, and other organic growth initiatives. This allocation underscores the company’s commitment to enhancing user experiences and staying at the forefront of technological advancements.
Leading the Charge
SBI Capital Markets, DAM Capital Advisors, and IIFL Securities are the book-running lead managers overseeing the Yatra Online IPO. Their expertise and experience in managing such financial transactions inspire confidence in the success of this offering.
A Resilient Business Model
Yatra Online’s journey to its IPO has been marked by a robust business model. In FY23, the company reported consolidated revenue from operations of Rs 380 crore, a significant increase from Rs 198 crore in the previous fiscal year. This growth can be attributed to the recovery in both consumer and corporate travel businesses following the impact of the Covid-19 pandemic. Impressively, the company achieved a profit of Rs 7.6 crore in FY23, highlighting its financial stability and potential for further expansion.
One of Yatra Online’s key strengths is its diversified go-to-market strategy. The company spans the entire travel and hospitality value chain, catering to both B2C (business to consumer) and B2B (business to business) segments, including business to enterprise and business to agents. With 813 large corporate customers and over 49,800 registered SME customers, Yatra Online has established itself as a trusted travel partner for businesses of all sizes. Additionally, its extensive travel agent network, comprising 29,800 agents across the country, reinforces its commitment to providing seamless travel solutions to all.
The Yatra Online IPO is poised to be a significant event in India’s travel industry, with the potential to redefine how Indians plan and book their journeys. With a clear plan for utilizing the funds raised, a strong track record of growth, and a robust business ecosystem, Yatra Online has positioned itself as a formidable player in the market.
As the IPO opens for subscription on September 15, all eyes will be on the response from investors and the impact it has on the company’s future. It’s a moment of anticipation and excitement not only for Yatra Online but also for the Indian travel industry as a whole. Stay tuned for updates as this story unfolds, potentially marking a new chapter in India’s travel history.
Yatra Online’s IPO: Transforming India’s Travel Industry