Yatra Online IPO booked 22% on Day 2 so far; retail portion fully subscribed

The Rs 775-crore initial public offering (IPO) of Yatra Online continued to witness a lackluster response from the investors during the second day of the bidding process on Monday. However, retail investors led the bidding. The issue had opened for bidding on Friday.

Yatra Online is selling its shares in the price band of Rs 135-142 apiece and investors can make a bid of a minimum of 105 equity shares and its multiples. The issue includes a sale of fresh equity shares worth Rs 602 crore, while an offer-for sale (OFS) of up to 1.21 crore equity shares worth Rs 173 crore.

According to the data, the investors made bids for 67,97,910 equity shares, or merely 22 per cent, compared to the 3,09,42,356 equity shares offered for the subscription by 13.40 pm on Monday, September 18. The issue will close for bidding on Wednesday, September 20.

The allocation for retail investors was booked 1.09 times, while the portion for non-institutional investors saw a subscription of only seven per cent. However, the portion reserved for qualified institutional bidders (QIBs) was not even off the mark at the same time.

Incorporated in 2005, Yatra Online provides information, pricing, availability, and booking facilities for domestic and international customers. The company provides domestic and international air ticketing on Indian and international airlines, as well as bus ticketing, rail ticketing, cab bookings, and ancillary services.

Brokerage firms have a mixed view on the issue as it has attracted both 'subscribe' and 'avoid' ratings from the analysts, considering the industry tailwinds improving the business and scalability. However, others have remained skeptical over the highly competitive market, seasonality in the leisure travel industry and high dependence on air ticketing business.

Considering the P/E valuation, on the upper end of the price band of Rs 142, the stock is priced at pre-issue P/E of 213.08 times on FY23 EPS of Rs 0.67. Post issue, the stock is priced at a P/E of 291.96 times on its EPS of Rs 0.49. Online penetration within the industry is expected to reach 73-75 per cent, said SMC Global.

"The company is India's largest corporate travel service provider enjoying third largest status on the basis of its gross booking and operating revenues for FY23. However, as the issue looks expensive, an investor who wishes to bet on the booming travel industry can look at other choices available in the secondary market in the segments like hotels," it added.

Yatra Online mopped up Rs 348.75 crore by allocation of 2,45,59,860 equity shares at a price of Rs 142 per share to 33 anchor investors including Morgan Stanley, Goldman Sachs, Societe Generale, BNP Paribas Arbitrage, Elara India Opportunities Fund, Whiteoak Capital, Quantum-State Investment Fund and various domestic mutual funds and insurance firms.

The company has reserved 75 per cent of the net offer for qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will get 15 per cent of the offering. Remaining 10 per cent of the offer shall go to retail investors.

SBI Capital Markets, DAM Capital Advisors and IIFL Securities are the book-running managers to the issue, while Link Intime India has been appointed as the registrar to the issue. Shares of the company are likely to be listed on both BSE and NSE.
 

Also Read: SAMHI Hotels IPO fully subscribed on final day of bidding; QIBs lead bidding process

Also Read: ICICI Pru, CAMS, Bank of India among 5 stocks that analysts suggest for short term

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.