|IPO-Note||Rategain Travel Technologies Limited|
|Rs 405- Rs 425 per Equity share||Recommendation: Neutral|
Rategain Travel Technologies Limited IPO Company Profile: –
Rategain Travel Technologies Limited provides hospitality and travel technology solutions through its SaaS (Software as a Service) platform across a wide spectrum of verticals including hotels, airlines, online travel agents (“OTAs”) etc. Its products are classified into three strategic business units: (a) Data as a Service (“DaaS”), (b) Distribution and (c) Marketing Technology (“MarTech”). Its solutions help hospitality and travel companies to find the right guest, decide the right price, distribute it to the preferred channel of the guest and once converted, help them have an exceptional experience. In Distribution segment, it operates RezGain and DHISCO. Rezgain operates on a subscription basis where customers pay a subscription fee to access the product while DHISCO operates on a transaction model where it generate revenues from bookings done by OTAs (Online Travel agents) and GDS operators. Daas Segment operates on a subscription model where customers subscribe to products such as Optima and Parity+.
Rategain Travel Technologies Limited IPO Details –
|Objects of the issue||·Repayment/prepayment of indebtedness availed by RateGain UK, one of our Subsidiaries, from Silicon Valley Bank
·Payment of deferred consideration for acquisition of DHISCO
·Strategic investments, acquisitions and inorganic growth
·Investment in technology innovation, artificial intelligence and other organic growth initiatives
· Purchase of certain capital equipment for our Data Center and General corporate purposes.
|Issue Size||Total issue Size -Rs. 1335.74 Cr.
Offer for Sale – Rs. 960.74 Cr.
Fresh Issue – Rs. 375 Cr.
|Face value||Rs.1.00 Per Equity Share|
|Issue Price||Rs. 405 – Rs. 425|
|Bid Lot||35 shares|
|Listing at||BSE, NSE|
|Issue Opens:||7th Dec, 2021 – 9th Dec, 2021|
|QIB||75% of Net Issue Offer|
|Retail||10% of Net Issue Offer|
|NIB||15% of Net Issue Offer|
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Rategain Travel Technologies Limited IPO Financial Performance:
Rategain Travel Technologies Limited IPO Shareholding Pattern:
|Shareholding Pattern||Pre- Issue||Post Issue|
|Promoters & Promoter Group||67.29%||56.58%|
Source: RHP, EWL Research
Rategain Travel Technologies Limited IPO Strengths:
- Marquee global customers base with 1434 customers including 8 Global Fortune 500 Companies with long-term relationships.
- Innovative AI driven industry relevant SaaS solutions;
- Comprehensive and diverse portfolio of revenue maximization
Rategain Travel Technologies Limited IPO Key Highlights:
- Revenue from operations grew 52% in FY20 however declined 37% in FY21 impacted by COVID- 19 Pandemic.
- EBITDA Margin declined from 8.3% in FY19 to 2.5% in FY21
- Employee Benefit expenses as percentage of revenue was 60.3% in FY21.
- Revenue from contracts in relation to Distribution segment was 48.57% in FY21 while from DaaS and Martech was 37.23% and 14.2% respectively.
- Contribution to total Revenue of North America, Asia Pacific and Europe was 65%, 15.19% and 14.99% respectively in FY21
- Revenue contribution from ten major customer groups was 37.01% of total revenue in FY21. It’s CFO/EBITDA Stands at 3.34 in FY21.
Rategain Travel Technologies Limited IPO Risk Factors:
- Substantial revenues are derived from the worldwide hospitality and travel industry which is most adversely impacted due to covid-19 pandemic
- Equity Shares issued during the preceding twelve months at a price which are below the Offer price.
- Customers typically are not obligated to renew, upgrade, or expand their contractually agreed terms which adversely impacted revenue of the company in FY19-FY21.
Rategain Travel Technologies Limited IPO Outlook:
Rategain Travel Technologies Ltd. provides hospitality and travel technology solutions through its SaaS platform. It serves a large and rapidly growing total addressable market. Its customers include Six Continents Hotels, Inc., an InterContinental Hotels Group Company, Kessler Collection, Lemon Tree Hotels Limited and Oyo Hotels and Homes Private Limited. Third party travel and hospitality technology industry is estimated to be a US$ 5.91 billion market in 2021 and expected to grow an estimated U$ 11.47 billion in 2025 at a CAGR of 18%. Rategain is the first SaaS Company to list in the Indian market hence there is no peer for comparison. At the higher price band of Rs 450, the offer is priced at a P/BV of 16.8 based on its NAV of Rs. 25.33 as of August 31, 2021. We have a neutral rating on company due to uncertainty in travel and hospitality industry with the ongoing COVID pandemic.
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Need An Assistance:
Rategain Travel Technologies Limited IPO FAQ
Ans. Rategain Travel Technologies Limited IPO will comprise fresh share issue and new offer share issue. The company aims to go public to accelerate its growth and expansion plan.
Ans. The company will open for subscription on 07 December 2021.
Ans. The minimum lot size that investors can subscribe to is 35 shares.
Ans. The Rategain Travel Technologies Limited IPO listing date is 17 December 2021.
Ans. The minimum lot size for this upcoming IPO is 35 shares.
Ans. KFin Technologies Private Limited will be the registrar for this upcoming IPO.