The initial public offering (IPO) of RateGain Travel Technologies has opened for subscription on Tuesday.
The Rs 1,335 crore-IPO of the travel and hospitality technology services provider will conclude on December 9. It consists of an offer for sale of Rs 960.74 crore and a fresh issue of Rs 375 crore.
According to the NDTV report, under the OFS its investor Wagner Limited along with its promoters Bhanu Chopra, Megha Chopra and Usha Chopra are offloading over 2.2 crore shares.
The company is planning to sell shares in the price band of Rs 405-425 per equity share and a retail investor can bid for minimum one lot of 35 shares and up to maximum of 13 lots. One lot of RateGain Travel Technologies shares in the IPO will cost Rs 14,875.
Promoters' shareholding stands at 65.4 per cent, which will come down to 55 per cent after the issue.
Proceeds from the fresh issue will be used for payment of debt availed by RateGain UK, one of the subsidiaries, from Silicon Valley Bank; payment of deferred consideration for the acquisition of DHISCO and strategic investments, acquisitions and inorganic growth.
Also, the funds will be invested in technology innovation, artificial intelligence and other organic growth initiatives; purchase of certain capital equipment for data centers; and general corporate purposes.
About 75 per cent of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.
Know what analysts/brokerage houses are saying, as per Moneycontrol.
Santosh Meena, head of research at Swastika Investmart
The company suffered losses in the last two years. However, as things will normalise post-Covid, things will offer bright prospects for the company.
RateGain has an asset-light business model with a strong management team, he added. The company is valued at a P/BV multiple of 16x on its NAV of Rs 26 for FY21.
Meena said the company is a first-mover and assigned a “subscribe” rating to the public issue for moderate listing gains. Investors can also consider the issue from a long-term perspective.
The brokerage house said it believes the firm’s premium valuations are justified given the company’s superior non-replicable product portfolio and highly predictable, scalable and profitable business model.
The investment firm has given a ‘subscribe for long term gains’ rating to the issue.
Sharad Chandra Shukla, director, Mehta Equities
At this juncture, the issue appears to be aggressively priced on negative earnings status and may generate interest in investors for first-mover advantage post-listing.
Overall negative earnings status is a concern as of now but growth prospects are optimistic. Only risk-seeking investors can consider subscribing to the IPO with a long-term perspective.