Rategain Travel Technologies IPO opens today; what should investors do?

The Initial Public Offering (IPO) of Rategain Travel Technologies Limited will open on 7 December (Tuesday). The three-day IPO of this SaaS services company will end on 9 December (Thursday).  

The bid lot comprises 35 equity shares and in multiples thereof. One can apply for a minimum of 35 equity shares and maximum subscription for retail investor has been capped at Rs 2 lakh, while the maximum subscription amount for eligible employee is Rs 5 lakh.

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The company which offers its services to hospitality and travel industry is planning to raise Rs 375 crore via fresh issue and will execute an Offer for Sale (OFS) of up to 22.6 million equity shares, according to the information available on the NSE website.

What should investors do?  
Dubbing the valuation expensive, brokerage house Marwadi Shares and Finance Limited has recommended to avoid this issue.  
"Considering FY22 Annualised EBITDA of Rs. 108.96 mn on the post-issue basis, the company is going to list at EV/EBITDA of 421.34 with the market cap of Rs.45, 367 mn. There are no listed companies in India whose business is comparable with that of the company’s business. We assign an “Avoid” rating to this IPO as valuation is expensive on an absolute basis," said Marwadi Shares and Finance Limited report.

Objective  
The company plans to use proceeds from this IPO to repay debt. It will also use the money for payment of deferred consideration for acquisition of Distribution Hospitality Intelligent Systems Company (DHISCO). The company also plans to use the money for purchasing capital equipment for its data centre and for general corporate purposes.  

Business & Company details

Rategain  travel  technologies Limited is among the leading distribution technology companies globally and the largest Software as a Service (SaaS) company in the hospitality and travel industry in India. The company offer travel and hospitality solutions across a wide spectrum of verticals, including hotels, airlines, online travel agents (OTAs), meta-search companies, vacation rentals, package providers, car rentals, rail, travel management companies, cruises and ferries.

"The Company serves 1,462 customers, including eight Global Fortune 500 companies. Its competitive intelligence products tracked over 3.61 billion price points across over 2,900 hotels. The aggregate value of bookings completed using company’s products was 628,579.15  mn, 487,579.95  mn and 141,866.83  mn  in Fiscals 2019, 2020 and 2021 respectively," Marwadi report highlighted.  

Book Running Lead Managers & registrar

The Book Running Lead Managers (BRLMs) to the issue are Kotak Mahindra Capital Company Limited, IIFL Securities Limited and Nomura Financial Advisory and Securities (India) Private Limited, while the sponsor bank is HDFC Bank Limited. The name of registrar is KFin Technologies Private Limited.

Rategain Travel Technologies IPO Timeline
Application start date: December 7, 2021      
Application end date: December 9, 2021      
Allotment beginning date: December 14, 2021      
Refund initiation date: December 15, 2021    
Allotment date: December 16, 2021    
Listing Date: December 17, 2021