The company has fixed a price band of Rs 405-425 per equity share, with the public issue consisting of a fresh issue of shares worth Rs 375 crore and an offer for sale (OFS) of up to 22.61 million shares by investors and promoters.
At the upper end of the price band, the total issue will be worth Rs 1,336 crore, the company said, with issue proceeds being used for repaying of debts and payment of deferred consideration for one of its acquisitions, apart from investments in growth and acquisitions.
“Given the pandemic, if I ask you or anybody what the one thing you want to do coming out of it is, the unanimous answer is travel. It’s this pent up demand, combined with rapid vaccination rates and positive global outlook that’s driving a CAGR of 26% in travel,” said Bhanu Chopra, founder and chairman at RateGain.
Chopra added that the pandemic has also created an increased reliance on social media and technology for hospitality players to drive bookings, which is growing demand for RateGain and putting the company on a path to recovering its revenues, which dipped last year, in the near future.
According to the company’s red herring prospectus (RHP) filed with India’s markets regulator on November 30, RateGain posted a loss of Rs 28.6 crore in FY21, compared to a loss of Rs 20.1 crore in the previous fiscal. Revenue on the other hand dropped to Rs 250.8 crore in FY21, from Rs 398.7 crore in the previous year on account of disruption due to the pandemic.
However, RateGain said that in the five months ending August 2021, it clocked a revenue of Rs 127.3 crore, a growth of around 28% when compared to a revenue of Rs 97.8 crore in the same period last year.
Chopra said that the company hasn’t yet seen any dip in its revenues due to the uncertainty created by the new Omicron strain of the virus, especially because around 65% of its revenues are driven by the US market which has been less affected by this.
“In terms of getting back to pre-Covid levels, we’re getting very close, and I do anticipate in Q4 (that will happen). We also have a much larger repertoire of products than pre-Covid thanks to innovations we’ve done and acquisitions we’ve done,” added Chopra, who said that he and his family will continue to own 55% stake in the company post the IPO.
As part of the IPO, RateGain’s investor Wagner Ltd. will offer 17.1 million shares, while promoters Bhanu Chopra will offer up 4 million shares, Megha Chopra 1.3 million shares and Usha Chopra up to 0.15 million shares. The offer will include a reservation of Rs 5 crore worth of shares for employees of RateGain at a discount of Rs 40 per share.
RateGain earns 74% of its revenues from subscriptions, with the US, which is bouncing back strongly post the pandemic, driving 64% of the company’s revenues, it said. The company grew at 50% year-over-year in 2019 and 2020 before the pandemic struck, but registered a degrowth in FY21.
