Travel and hospitality solutions provider Rategain Travel Technologies made a weak debut on the bourses on December 17 as it listed with a 15 percent discount.
The stock opened at Rs 364.80 on the BSE, against an issue price of Rs 425 per share, while the opening price on the National Stock Exchange was Rs 360.
The public issue of the company had seen a lot of interest from investors with 17.41 times subscription during December 7-9. Non-institutional investors had bought shares 42.04 times the portion set aside for them and the qualified institutional buyers portion was subscribed 8.42 times. Retail investors had put in bids for 8.08 times the allotted quota and the employee portion was subscribed 1.37 times.
The largest Software as a Service (SaaS) company in the hospitality and travel industry in India has mobilised Rs 1,335.74 crore through its public issue. The offer was composed of a fresh issue of Rs 375 crore, and an offer-for-sale of Rs 960.74 crore by investor and promoters.The company will repay debts availed by RateGain UK, one of the subsidiaries from Silicon Valley Bank, and make a payment of deferred consideration for acquisition of DHISCO.
It will also utilise fresh issue proceeds for strategic investments, investment in technology innovation, artificial intelligence and other organic growth initiatives, and purchase of certain capital equipment for data centre.
The price band for the offer was Rs 405-425 per equity share.
Also read - Medplus Health trading at 26% premium in grey market after IPO close
Most brokerages had assigned a ‘subscribe’ rating for the Rategain Travel Technologies public issue.“The issue is priced at a price/sales multiple of 17.3x and 18.1x of its FY21 sales, respectively, which we believe is reasonable keeping in mind the unique nature of its business and almost nil competition in the Indian market. Also, with easing of restrictions and the travel industry getting back to normalcy, the company will further improve its business going forward. Hence, we assign a ‘subscribe’ rating to the IPO,” said KR Choksey Research.
Also read - MapmyIndia IPO share allotment: Check out the status, latest grey market premium, listing date
Hem Securities also recommended ‘subscribe’ on issue for limited listing gain to risk takers while issue looks good bet for long-term investment.
“The company with its marquee global customers and long-term relationships has innovative AI-driven industry-relevant SaaS solutions. Also, the company’s diverse and comprehensive portfolio of revenue maximisation and business-critical solutions with strong financial performance has a track record of successful acceleration after acquisitions,” Hem Securities said.
“Although the company has made losses in FY20 and FY21 but, going forward, if the situation regarding the Omicron variant remains favourable, then we think the company will show strong performance,” it said.
The losses of Rategain widened to Rs 28.57 crore in FY21 from Rs 20.1 crore a year back, impacted by the COVID crisis. Revenue from operations also declined to Rs 250.79 crore from Rs 398.7 crore during the year.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
You must be logged in to post a comment.