Yatra Online IPO subscribed 1.6x on the last day

Yatra Online IPO subscribed 1.6x on the last day
Source: Canva
  • The issue’s non-institutional investor portion was not fully subscribed.
  • Proceeds from the fresh issue will be used for strategic investments, customer acquisition and retention, technology and more.
Yatra Online’s ₹775 crore initial public offer was subscribed 1.6 times the shares on offer, on the last day of the subscription.

Qualified institutional buyer (QIB) and retail portions were subscribed twice over, while non-institutional investor portion was not fully subscribed.

The price band of the issue has been fixed at ₹135-142 per equity share. Investors can bid for a minimum lot of 105 equity shares and in multiples of 105 thereafter.

The IPO comprised a fresh issuance of shares worth ₹602 crore and an offer for sale (OFS) of up to 12,183,099 shares. It had undertaken a pre-IPO placement of ₹62.01 crore by way of rights issue and allotted 2,627,697 shares of face value ₹1 each to its promoter, THCL in December 2022.

CategoryNo of times subscribed
Non institutional investors0.42

Source: BSE

‘Can gain from industry tailwinds’

Yatra Online offers access to hotels, homestays, and other accommodations through its platform. It is a one-stop shop for travellers, offering vacation packages as well as visa facilitation, tours, sightseeing, shows, and events.

Proceeds from the fresh issue will be utilized towards strategic investments, acquisitions, and inorganic growth, customer acquisition and retention, technology, and other organic growth initiatives and general corporate purposes.

The company claims to be India’s largest corporate travel services provider in terms of number of corporate clients. It is the third largest online travel company in India among key online travel agency (OTA) players in terms of gross booking revenue and operating revenue for FY23.

The company’s revenues have been growing steadily for the last three years and has turned profitable in FY23, after cutting its losses progressively over two years.

At the upper price band, the company is valued at a market-cap to sales ratio of 5.8 times as per its FY23 earnings. Its peer EaseMyTrip is valued at 15.7 times, as per Anand Rathi Securities.

“We believe that for Yatra there is a scope of business improvement on the back of industry tailwinds, brand recall and business scalability, resulting in expansion of the EBITDA margin from here on,” the report said, adding that it recommends a ‘subscribe’ rating for the long term.