RateGain IPO: The Rs 1,336 crore IPO of RateGain Travel Technologies, one of the distribution technology companies, has opened today. The company has fixed a price band of Rs 405-425 for this IPO. Through the IPO, Rategain Travel will sell approximately 31,441,282 equity shares with a face value of Re 1. Shares of Rategain were trading at a premium of Rs 100 per share in the gray market. The issue will open for subscription today and will close on December 9.
Issue related details
- Under this IPO, fresh shares worth Rs 375 crore will be issued, while shares worth Rs 961 crore will be sold under Offer for Sale (OFS) by the shareholders of the company.
- Investors can bid for 35 equity shares in the fixed price band of Rs 405-425 per share for the IPO.
- 75% of the issue is reserved for Institutional Investors. At the same time, 15% share has been reserved for high net worth investors and the remaining 10% for retail investors.
- Post the issue, the stake of promoter and promotergroup will come down to 56.6% from the current 67.3%, while the public shareholding in the company will increase from 32.7 per cent to 43.4%.
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Company details and expert opinion
- The company provides hospitality and travel related services including hotels, airlines, online travel agents (OTAs), meta-search companies, vacation rentals, package providers, car rentals, rail, travel management companies, cruises and ferries.
- Analysts at Prabhudas Lilladher say that RateGain Travel has a reach to customers globally. Because of this, the company will benefit from cross-selling.
- The company’s clients include 7 global car rental companies, major cruise lines, 23 of the top 30 hotel chains, 25 of the top 30 OTAs and the world’s fastest growing airlines.
- In this age of data, RateGain has a strong backbone to aid its growth.
- RateGain is one of the largest aggregators of travel-related data in the world. Aditya Birla Capital has given a ‘Subscribe’ rating to the issue for long term gains.
- Analysts say the company wants to leverage this by using its data in the travel and hospitality industry to offer cross-vertical products.
- Even as the world is coming out of the COVID-19 pandemic, the IPO of RateGain Travels may suffer due to the new variant of the corona virus, Omicron.
- Choice Broking said, due to the Omicron variant, countries across the world have started implementing travel restrictions. We feel that the current pandemic is not good for the global travel and hospitality industry.
- At the upper price band of Rs 425, Choice Broking said the issue is priced at a P/S of 18.1X on FY21 sales and 15.1X on FY22E annual sales, said Choice Broking. Describing it as expensive, the brokerage firm has advised investors to be careful in buying it.
(Article: Kshitij Bhargava)
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