RateGain Tech is an Innovative AI-based SaaS provider company. The company has a comprehensive service and product portfolio, emphasizing the travel and hospitality sector. In this article, we take a closer look at the RateGain Technologies IPO Review and its possible future prospects.
The company’s business operation is divided into three significant verticals, which are as follows:
| Data as a Service | The company provides AI, Competitive Intelligence, and Data Analysis through it. The company provides information on two fronts under this platform. Market intelligence: Dynamic Pricing Recommendations |
| Distribution | Distribution services cater to their demand partners for pricing, content connection, inventory. |
| Marketing Technology | Through this platform, the company improves the visitor’s experience; it also manages up the social media platform along with promotional program management. |
RateGain started its business operation in 2004. Initially, it began with a market research platform. The company offers a service that bridges the data gap in the hospitality and travel sector through AI-driven technology. The company is also engaged in a Machine Learning facility in various service ranges from cognitive revenue governance, Rate intelligence, and brilliant distribution merchandise.
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OBJECTS OF THE IPO ISSUE:
- Prepayment of all or significant part of the loan on the company on a consolidated basis.
- To accomplish corporate targets.
BASIS OF THE RATEGAIN TECHNOLOGIES IPO OFFER
- Through their main business operation, RateGain Travel Tech can compete adequately in the industry.
- The company has a Long-term association with some significant worldwide clients.
- RateGain Travel Tech provides AI-driven and Industry-relevant SaaS solutions.
- The company has multiple sources of Revenue maximization with a well-diversified and extensive service and product portfolio.
- RateGain Travel Tech has an excellent track record of success in front of operational and financial terms.
RATEGAIN TRAVEL TECHNOLOGIES IPO:
RateGain Travel Technologies Limited, one of the leading tech companies providing SaaS solutions in Travel and Hospitality, has its headquarters in New Delhi. The company recently got approval from SEBI to float its IPO in the market. The company’s IPO is of Rs.400 Crore issue of fresh equity, and an OFS been brought forward by the promoter and the selling stakeholders of worth 22,605,530 equity shares of the company. Check Day by Day IPO Subscription Details (Live Status)
The selling stakeholders of the company are as follows:
| Wagner Limited | 1.71 crore equity shares |
| Bhanu Chopra | 40.44 lakh equity shares |
| Megha Chopra | 12.94 lakh equity shares |
| Usha Chopra | 1.52 lakh equity shares |
The company stated that it would use the funds from the IPO’s issue of fresh equity to pay their debt to their subsidiary RateGain UK along with the fee for deferred consideration and strategic acquisition of DHISCO. The company also stated that it would use the funds for the inorganic growth of the company through investing in the new technology, artificial intelligence, and expansion of their capital structure and equipment used in their data centers.
| IPO Opening Date | 07 December 2021 |
| IPO Closing Date | 09 December 2021 |
| Issue Type | Book Building Type |
| Face Value | Rs.1/ Equity Share |
| IPO Price | Rs. 405 – Rs. 425 / Equity share |
| Market Lot | 1 lot of 35 shares |
| Minimum Lot | 1 lot comprising of 35 shares |
| Maximum Lot | 13 lots comprising to 455 shares |
| Minimum Amount | Rs.14875 |
| Maximum Amount | Rs. 193,375 |
| Listing At | BSE, NSE |
| Issue Size | Rs. 1,335 Crores |
| Fresh Issue | Rs. 375 Crores |
| Offer for Sale | 22,605,530 equity shares |
| Basis of Allotment Date | 14 December 2021 |
| Initiation of Refunds | 15 December 2021 |
| The Credit of Shares to Demat Account | 16 December 2021 |
| IPO Listing Date | 17 December 2021 |
| Basis of Allotment Type | % Of the Allotment of the IPO Offer |
| Qualified Institutional Buyer | 75 |
| Non-Institutional Investor | 15 |
| Retail | 10 |
WEAKNESS AND THREATS OF RATEGAIN TECHNOLOGIES IPO:
- COVID-19 pandemic’s effect has been on every company. RateGain Travel Technologies was one of the significant companies been affected by the pandemic due to the lockdown and restrictions hurting the business outlook for the travel and hospitality sector. The company registered a negative performance upfront on the bottom and top line on financial and operational levels.
- Its primary revenue stream is from its numerous business operations to small clients with minor market share and reach. It will hamper the growth rate of the company.
- The company also stated it would carry out strategic investments and acquisitions. Any negative news regarding it will lead to the failure of the company’s operation.
- RateGain Travel Technologies needs to properly implement its expansion and growth strategies to expand its operation, product line, and services offered.
- RateGain Travel Tech is also vulnerable to the fluctuation of forex rates.
- The company is also vulnerable to Cyber Security, Database Management attacks, and mismanagement.
- It is also vulnerable to the failure to defend its intellectual property rights, brand image.
- RateGain Travel Tech can also experience failure regarding their pricing methods for retention and attracting new clients.
- The company is still a loss-making company. COVID-19 has also increased their loss, affecting their operational and business margins and parameters.
- The company is also vulnerable to delivering quality customer support and customer service. Any service not up to expectation might hurt the image and brand of the company.
- RateGain Travel Tech is currently facing a trial under legal procedure. Any negative news on this front will affect the image and brand awareness of the company.
- The primary concern for the company currently is the new variant of the COVID-19 Omicron Variant, which may further impose restrictions on travel and hospitality.
Also Read :
List of Upcoming SME IPO’s in India.
STRENGTHS AND GROWTH ASPECTS OF RATEGAIN TECHNOLOGIES IPO:
- The company operates on an asset-light business model. It helps the company achieve high margins and exhibit solid financial performance on their books.
- The company’s senior management and technical team are full of many experienced and well-respected people. These individuals are stuck to the company’s board. It shows the trust of their employees and the in turn of growth of the company.
- RateGain Travel tech has a vast client base of 1,400 customers, including 8 companies in the Fortune 500 Index. It is also associated with many hospitality sector giants such as Lemon tree hotel chains, Oyo Hotels, and many more.
- RateGain Travel Tech is a multi-diversity company. It provides a well-diversified service and caters to many sectors. It is associated with 1186 Large and Mid-size hotels, 104 partners in Cruise, car rentals, airlines and travel associates’ partners, and 144 OTA groups distribution partners. Their client base is hugely spread over with reach in 110 countries.
- RateGain Tech also has the advantage of being a pioneer and the first mover in the sector of its engagement.
- During the pandemic period, the company focused on expanding its product and service portfolio. RateGain Travel Tech expanded its service to 10 services from 4.
- The company will benefit most from the opening up theme that includes revenge travel and revenge eating. Rate Gain’s presence in the hospitality and travel sector will enhance its operational and financial performance.
- RateGain Travel Tech Limited is the country’s largest SaaS company and a global leader in the distribution technology business.
- The company will benefit from the growth in the hospitality and travel sector. It is expected that the company will grow with a CAGR of 18%. The market is expected to rise to 11.47 billion USD in 2025.
- RateGain Travel Tech will also benefit from the industry digitalization in its sector of operation.
- It has a proven track record with an established financial performance.
FINANCIAL TRENDS OF RATEGAIN TECHNOLOGIES IPO:
| PARAMETER | MARCH 21 | MARCH 20 | YoY % |
| Earnings Per Share (Rs) | -436.26 | -306.93 | -42.14 |
| CEPS(Rs) | 111.54 | 344.90 | -67.66 |
| Book NAV/Share (Rs) | 3157.74 | 2003.77 | 57.59 |
| Tax Rate (%) | -16.03 | -13.19 | -21.55 |
| Core EBITDA Margin (%) | 2.90 | -6.05 | 147.88 |
| EBIT Margin (%) | -6.11 | -1.99 | -207.56 |
| Pre-Tax Margin (%) | -9.82 | -4.45 | -120.44 |
| PAT Margin (%) | -11.39 | -5.04 | -125.97 |
| Cash Profit Margin (%) | 2.91 | 5.67 | -48.58 |
| ROA (%) | -6.88 | -5.96 | -15.48 |
| ROE (%) | -16.90 | -14.60 | -15.82 |
| ROCE (%) | -5.02 | -3.76 | -33.52 |
| Asset Turnover(x) | 0.60 | 1.18 | -48.90 |
| Sales/Fixed Asset(x) | 0.76 | 1.66 | -54.54 |
| Working Capital/Sales(x) | 1.42 | 7.46 | -80.94 |
| Fixed Capital/Sales(x) | 1.32 | 0.60 | 119.98 |
| Receivable days | 105.21 | 64.51 | 63.08 |
| Inventory Days | 0.00 | 0.00 | 0.00 |
| Payable days | 58.44 | 36.31 | 60.92 |
| EV/Net Sales(x) | 0.22 | 0.23 | -4.72 |
| EV/Core EBITDA(x) | 2.69 | 2.65 | 1.36 |
| EV/EBIT(x) | -3.61 | -11.64 | 69.02 |
| EV/CE(x) | 0.13 | 0.23 | -46.03 |
| Net Sales Growth (%) | -37.10 | 52.43 | -170.76 |
| Core EBITDA Growth (%) | -40.87 | 2.61 | -1667.05 |
| EBIT Growth (%) | -93.46 | -157.92 | 40.82 |
| PAT Growth (%) | -42.14 | -282.20 | 85.07 |
| EPS Growth (%) | -42.14 | -282.20 | 85.07 |
| Total Debt/Equity(x) | 0.54 | 0.88 | -38.75 |
| Current Ratio(x) | 2.94 | 1.46 | 102.02 |
| Quick Ratio(x) | 2.94 | 1.46 | 102.02 |
| Interest Cover(x) | -1.65 | -0.80 | -104.55 |
| Particulars | For the year with amount ending in Crore | ||||
| 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | |||
| Total Assets | 439.80 | 397.11 | 284.90 | ||
| Total Revenue | 264.09 | 457.61 | 272.70 | ||
| Profit After Tax | -28.58 | -20.10 | 11.03 |
PROMOTERS:
Bhanu Chopra
Megha Chopra
| Pre-Issue Share Holding | 81.50% |
| Post Issue Share Holding |
CONTACT DETAILS:
RateGain Travel Technologies Limited
M-140, Greater Kailash Part II,
New Delhi 110 048, Delhi, India
Tel: +91 120 5057 000
E-mail: compliance@rategain.com
Website: www.rategain.com
REGISTRAR:
KFin Technologies Private Limited
Selenium, Tower B, Plot No 31,32
Financial District, Nanakramguda, Serilingampally
Hyderabad, Rangareedi 500 032 Telangana, India
Tel: + 91 40 6716 2222
E-mail: rategain.ipo@kfintech.com
Website: www.kfintech.com
LEAD MANAGER(S):
- IIFL Securities Limited
- Kotak Mahindra Capital Company Limited
- Nomura Financial Advisory and Securities Private Limited (India)
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