- By Vaamanaa Sethi
- Thu, 28 Sep 2023 11:06 AM (IST)
- Source:JND
Online travel agency Yatra Online made a disappointing debut on Dalal Street on September 28. Yatra Online shares listed at a discount of 10% to issue price at Rs 127.50 on NSE and Rs 130 per share on BSE, against issue price of Rs 142.
The issue had also received a muted response from investors, with 1.61 times subscription, with bids for 4.98 crore equity shares against an offer size of 3.09 crore shares.
The travel company incurred losses in the fiscal years ending March 2021 and March 2022. However, in FY23, it reported a net profit of Rs 7.6 crore, primarily attributed to a deferred tax expense that allowed for the offsetting of previous losses against future profits. Market observers are now closely monitoring the company to see if it can sustain its profitability in the upcoming periods.
In addition to Yatra's negative cash flow, analysts have expressed concerns about the IPO's exceedingly high valuation, with a trailing price-to-earnings multiple of 205x.
The company claims to be the third largest online travel company and also said it is India's leading corporate travel service provider with 813 large corporate customers, and over 49,800 registered SME customers.
The travel company aimed to raise Rs 775 crore via the IPO at the upper end of the price band of Rs 135-142 per share. The fresh issue component in the IPO was Rs 602 crore and the remaining funds were to be raised via offer-for-sale worth Rs 173 crore.
SBI Capital Markets, DAM Capital Advisors, and IIFL Securities were the merchant bankers to the issue, while Link Intime India is the registrar.
The company will utilise the net fresh issue proceeds for strategic investments, acquisitions and inorganic growth amounting to Rs 150 crore, and investment in customer acquisition and retention, technology, and other organic growth initiatives, estimated at a cumulative sum of Rs 392 crore. The remaining money will be used for general corporate purposes.