In this article, we’ll talk about the public stakes of RateGain Travel Technologies – a Noida-based travel technology startup.

The three-day IPO of RateGain Travel Technologies will be open for subscription on December 7. The software as a service (SaaS) company plans to list Dec. 17 on the exchanges.

The company’s anchor book is slated to open for one day on December 6, 2021.

The company has set a price range of ??405-425 per share for its public offering. At the higher end of the price bracket, the show will pick up the company ??13.4 billion.

Kotak Mahindra Capital Company, IIFL Securities and Nomura Financial Advisory, and Securities (India) are primarily responsible for the matter.

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RainGate Travel IPO.

Promoter’s participation in the company

Bhanu Chopra and Megha Chopra are the promoters of the company.

The promoters own 67.29% of the shares of the company and the remaining shares are held by public shareholders, including Wagner and Avataar.

Investor Wagner will get rid of 17.1 million shares through an Offer to Sell (OFS), while promoters Bhanu Chopra, Megha Chopra and Usha Chopra will sell 5.5 million shares.

Reserved portion by category

Up to 75% of the net issuance is reserved for Qualified Institutional Buyers (QIB), while non-institutional buyers will be allocated 15% of the shares.

The retail share has been set at 10% of the net supply. Retail investors can invest a minimum of ??14,875 for a lot, and their maximum investment would be ??193,375 for 13 lots.

The company also awarded shares worth ??50m for its eligible employees and will grant a discount of ??40 per share for eligible employees bidding in the portion reserved for them.

Use of net proceeds

In accordance with the Red Herring Prospectus (RHP), RateGain will now use ??852.6 million to repay a loan contracted by RateGain UK from Silicon Valley Bank. In the DRHP, this expenditure was linked to ??864 meters.

In addition, the company will use ??252m of the proceeds as deferred consideration for the acquisition of DHISCO from 2018. This consideration was earlier at ??262 m.

He will also seek to invest ??800m of strategic investments, acquisitions and inorganic growth and ??500m for technological innovation, artificial intelligence (AI) and other organic growth initiatives.

Previously, the company had offered to allocate ??433m for the purchase of certain capital goods for its data center and this proposed expenditure has now been reduced to ??407.7 m.

A brief overview of the company

RateGain Travel Technologies is one of the world’s leading distribution technology companies and the largest provider of software as a service provider to the travel and hospitality industry in India.

The company offers travel and hospitality services in various industries such as hotels, airlines, online travel agents, meta-search companies, package providers, car rentals, cruises and the ferries.

The company provides interconnected products to manage the revenue-generating value chain by leveraging Big Data capabilities and integration and, during the period, expanded its product portfolio to include AI capabilities and machine learning.

RateGain Travel provides travel and hospitality technology solutions through the SaaS platform across 3 business units.

1. Data as a service (DaaS)

2. Distribution

3. Marketing technology (MarTech)

RateGain Travel Technologies customers

As of June 30, 2021, it had more than 1,400 clients, including eight global Fortune 500 companies.

Its clients include Six Continents Hotels, InterContinental Hotels Group, the Kessler Collection luxury hotel chain, Lemon Tree Hotels and Oyo Hotels and Homes Private Limited.

It targets 1,186 large and mid-sized hotel chains, 104 travel partners, such as airlines, car rental and cruise companies, and more than 144 distribution partners such as travel agencies in line (OTA) like GroupOn and distribution companies like Saber GLBL Inc. customers in over 110 countries.

Quick overview of the company’s financial statements

The company recorded a consolidated loss of ??285.7m in 2021, against loss of ??201 m the previous year. The turnover for the same year fell to ??2.5 billion ??4 billion.

During the five-month period ended August 2021, the loss amounted to ??83.3 m against loss of ??78.5 m during the same period of the previous financial year.

However, operating revenues increased to reach ??1.3 billion over the same period, from ??978.9 m year to year (YoY).

Key parameters.

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Key parameters.

The Covid-19 pandemic has had a negative impact on the business, financial condition and operating results of the company.

According to Travel Tech’s prospectus, disruptions in the operations of the company’s clients and potential clients, including due to travel restrictions and business closures, uncertainties in the financial markets or other damages to their business and financial performance, resulting in reduced information technology budgets, delayed purchase decisions, longer sales cycles, extended payment terms, payment schedules, the ability to pay for services and on-time or no-time solutions and postponed or canceled projects all had a negative impact on the business and operating results of the company, including sales and cash flow.

Competitive strengths

Strong customer base with 1,434 clients, including 8 Global Fortune 500 companies as of June 30, 2021.

Provider of innovative, industry-relevant AI-based SaaS solutions.

Complete product portfolio solutions for the travel and hospitality industry.

Strong financial performance with an established history of successful post-acquisition acceleration.

Diverse management team with expertise in the field.

Risk of IPO of RateGain Travel Technologies

The Covid-19 pandemic has had a substantial negative impact on their business and operational performance, and its future impact is unknown.

The activities of a small number of marketplaces represent a substantial percentage of their income.

They may not derive the expected benefits from their strategic investments and acquisitions, and they may not continue with their future investments and acquisitions.

They may face new problems and dangers as they expand into new lines of business or product lines.

They have a history of net losses and expect their costs to increase in the future.

Failure to provide excellent customer service and support can negatively impact their existing customer relationships.

Changes in exchange rates may adversely affect their operating results.

Failure to defend their intellectual property rights can have a negative impact on their business and their brand.

Tourism could move off course of recovery as travel agencies brace for Omicron’s impact

The spread of the new variant of the Covid-19 virus could block the recovery of the tourism sector.

The World Health Organization (WHO) has called the Omicron mutation, first detected in South Africa, a “variant of concern” that poses a very high global risk.

Many players in the travel industry are worried about cancellations in the coming days as countries tighten travel restrictions.

This could adversely affect the business operations of RateGain Travel Technologies and its customers in the coming months.

The Indian tourism industry, which is hoping for a revival after being hit hard for nearly two years, is on hold over the impact the new variant of Covid Omicron could have on the sector.

The IPO market is booming in India. Will the trend continue?

Following the recent market correction, market participants should keep an eye on the Indian and global markets as the new corona variant has hit global stock markets very hard.

It could also affect the primary market.

However, given the abundant liquidity and the relaxation of listing procedures by the market regulator, the IPO craze is understandable.

Data suggests the companies raised US $ 4.6 billion in IPOs last year. The market estimates that this amount will be easily exceeded in 2021.

As companies line up to raise funds in the market against a backdrop of high valuations, there are many factors that investors need to consider before investing their money in an IPO.

If you are investing in an IPO, weigh all the positive and negative factors affecting the business.

Take a close look at the company’s financial statements and valuations. It would give you a clear picture of what’s to come.

Good investment!

(This article is syndicated from Equitymaster.com)

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