Yatra Online, the leading corporate travel services company, has concluded its initial public offering (IPO) on Wednesday after receiving a tepid response from investors. The IPO, which aimed at raising Rs 775 crore at the higher price band, saw a subscription of 62%, with bids for 1.93 crore equity shares against an offer size of 3.09 crore shares.
Despite the overall lukewarm response, retail investors displayed significant support for the IPO, purchasing 1.82 times their allotted quota of 10% of the offer size. However, the portions set aside for qualified institutional buyers (QIB) and high net-worth individuals, which made up 75% and 15% of the IPO size, respectively, were subscribed only 46% and 15%. For an issue to be successful, it generally requires at least a 90% subscription in the QIB category.
The IPO opened on September 18 with a price band of Rs 135-142 per share. Ahead of the opening, Yatra Online had raised Rs 348.75 crore from anchor investors on September 14. Notable among these investors were BNP Paribas (OTC:BNPQY) Arbitrage, Societe Generale (OTC:SCGLY), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), ICICI Prudential (LON:PRU) Mutual Fund, Elara India Opportunities Fund, Bandhan Mutual Fund, and Tata Mutual Fund.
Yatra Online plans to allocate the net fresh issue proceeds primarily towards strategic investments and acquisitions for inorganic growth at a cost of Rs 150 crore. Further, Rs 392 crore will be invested in customer acquisition and retention, technology enhancements and other organic growth initiatives. The remaining funds will be used for general corporate purposes.
In the past financial year, Yatra Online managed to turn a profit with earnings of Rs 7.6 crore in FY23, as compared to a loss of Rs 30.78 crore the previous year. Revenue for FY23 was Rs 380.16 crore, nearly double the Rs 198 crore (INR100 crore = approx. $12 million) reported a year earlier.
The allotment of IPO shares is expected to be finalized by September 25 and credited to the demat accounts of eligible investors by September 27. Unsuccessful investors or ASBA account holders can anticipate refunds or account unblocking by September 26. Trading in Yatra Online's equity shares on the BSE and NSE is set to begin from September 29.
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