Yatra Online IPO subscription window closes on Wednesday; should you apply for it?

The three-day subscription window for travel services company Yatra Online's IPO, to raise an estimated Rs 775 crore, ends on Wednesday, September 20.

Yatra Online is a Gurugram-based travel services company. | Image: Pexels

Travel services company Yatra Online’s initial share sale, to raise up to Rs 775 crore, opened last week, and will close on Wednesday, September 20. Gurugram-based Yatra Online owns and operates the travel portal Yatra.com. The IPO of Yatra Online comprises fresh issuance worth Rs 602 crore, and an offer for sale (OFS) worth Rs 173 crore by promoters and existing shareholders, meaning part of the proceeds will go to the company.

Should you subscribe to the Yatra Online IPO?

EDITOR’S TAKE | Better to avoid, only meant for "very high risk-taking" investors

Zee Business Managing Editor Anil Singhvi is of the view that the IPO is only suitable for investors with a “very high” appetite for risk and that even such investors should apply from a long-term perspective.

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For other investors, he suggests avoiding the issue and considering buying the stock only after the listing.

Here are some of the important details about the Yatra Online IPO:

Important dates

The basis of the allotment of shares is set to take place tentatively on September 25, and the credit of shares into the accounts of winning bidders on September 27. The Yatra Online stock is likely to be listed on bourses BSE and NSE on September 29.

Subscription status

At 3:15 pm on Monday, the second day of the bidding process, the IPO was booked an overall 27 per cent of the total issue, with bids for 83.2 lakh shares against the 3.1 crore shares on offer, according to provisional exchange data.

Category	Reservation	Subscription
Qualified institutional buyers (QIBs)	75%	6%
Non-institutional investors (NIIs)	15%	7%
Retail investors	10%	1.2 times
Overall		27%

While 75 per cent of the total issue is reserved for qualified institutional buyers (QIBs), 15 per cent is meant for non-institutional investors (NIIs)—also known as high net-worth individuals, and the remaining 10 per cent for retail investors.

Issue price

Under the IPO, market participants can bid for Yatra Online shares in a price band of Rs 135-142 apiece in multiples of 105 shares, which translates to Rs 14,175-14,910 per lot.

What analysts make of the IPO

Arihant Capital recommends subscribing to the issue for listing gains. The offer is made at a post-IPO EV/EBITDA multiple of around 30.9 times at the upper end of the price band, according to the brokerage.

"The company has created a distinctive 'go-to-market' approach in both B2B and B2C segments indicative of a large addressable market. With a heightened focus on the high-margin corporate business, we expect the company to display strong bottom-line growth in the years to come. The B2B business is expected to grow at a five-year CAGR of 15 per cent for the next five years," wrote analysts at Arihant Capital in a research report, dated September 15.

Analysts at GEPL Capital have an 'avoid' rating on the Yatra Online IPO.

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