Drawing inspiration from the public issues of Paytm, Zomato, and Nykaa, Yatra Online Limited has also signified its plans of entering the IPO space by submitting a draft red herring prospectus. Since the Gurugram-based online travel agency is one of the largest players in the online travel industry in the country, its public issue is sure to make heads turn. Continue reading to find out all about the upcoming Yatra IPO.
Established in 2006, Yatra Online Limited was one of the first online travel agencies in India. Thanks to its first-mover advantage and sophisticated booking platform, the company has grown to become the largest travel services provider for corporates in the country.
In terms of gross booking and operating revenue, Yatra was the second-largest online travel company in India in FY2020. According to a CRISIL report, Yatra Online Limited had the most number of tie-ups with hotels and accommodations (20,94,000 to be exact) as of October 29, 2021.
The company’s primary business verticals can be split into two - travel bookings and hotel and accommodation bookings. Additionally, Yatra also provides other services such as travel visa applications and adventure activity bookings. The company also earns revenue through targeted third-party advertisements on its website and the sale of vouchers, coupons and travel insurance.
The multi-pronged market strategy of Yatra is designed to ensure that it caters to both the B2C (Business to Consumer) and B2B (Business to Business) segments.
To help you decide whether the Yatra Online Limited IPO is worth investing in, we’ve compiled a table outlining the key financial performance indicators for the past three years.
(figures are in ₹ crores)
|As of September 30, 2021||FY21||FY20||FY19|
|Equity Share Capital||11.18||11.09||10.62||10.22|
|Diluted Earnings Per Share (EPS)||-1.71||-11.08||-6.62||-23.07|
|Net Asset Value (NAV) per equity share||10.12||11.51||20.13||25.41|
Note: Diluted EPS and Net Asset Value (NAV) per equity share have been expressed in ₹.
In the draft red herring prospectus, Yatra Online Limited has listed certain key strengths that it possesses. Let’s take a look at a few of them.
Now that you’ve seen the strengths of the company, let’s move on to the key risks that can threaten Yatra Online Limited’s business.
With the key strengths and risks out of the way, let’s take a look at the information that matters the most - the public issue itself. Since Yatra Online Limited has only filed the draft red herring prospectus, significant pieces of information related to the IPO are missing. This includes the date of opening and closing of the issue, the price band and the total number of shares being sold via the Yatra IPO.
However, there are a few important pieces of information that have been made available to the public via the DRHP. Here’s what they are.
Firstly, the public issue has both a fresh issue component and an offer for sale (OFS) from a promoter of the company and a selling investor. Through the fresh issue, the company is looking to raise about ₹750 crores, which it plans to use to fulfil certain objectives. Through the offer for sale, the two selling shareholders are planning to offload about 93,28,358 equity shares.
Since the company is loss-making, the reservation portion for retail investors has been restricted to 10% of the total offer. Out of the remaining 90% of the issue, about 15% has been reserved for Non-Institutional Investors (NIIs) and the balance 75% has been set aside for Qualified Institutional Buyers (QIBs).
As per the DRHP, the ₹750 crores that Yatra Online Limited raises through the IPO would be used to satisfy the following list of objectives.
With the financial year 2022 - 2023 coming to a close in a few days, the Yatra Online Limited IPO will likely be pushed to the upcoming fiscal year. Even then, with the current market scenario, the issue might only do well if it is priced right. That said, more information regarding this will come to light only once the company files its final red herring prospectus.
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