Yatra Online going public as recovery unfolding in travel sector

Focus points for Bon voyage:

• Decline in revenue by 81.37% to Rs125.45 cr from Rs673.33 cr in PY, due to Covid-19 travel restrictions in FY21

• Growth in Indian travel industry at 8-10% CAGR between fiscal 2015 to 2020, to a size of Rs2,470-2,490 bn, expected to grow annually by 5-7% to Rs3,350-3,370 bn by fiscal 2025

• India's largest corporate travel services provider and the second largest OTA player with approx 700 large corporate, over 46,000 registered SME customers

• India's fastest growing aviation industry and the govt focusing on UDAN services and expanding the airport infrastructure to cover tier-2, 3 and 4 cities and towns

• One-stop store for travellers, offering vacation packages as well as visa assistance, excursions, sightseeing, entertainment, and events

Mumbai.: Yatra Online Inc's Indian subsidiary has filed DRHP for its forthcoming IPO. Yatra Online Limited, country's largest corporate travel services provider and the second largest online travel company among key online travel agency (OTA) players in terms of gross booking revenue and operating revenue, for fiscal 2020 has filed its draft red herring prospectus (DRHP) with market regulator Sebi to raise funds via an initial public offering (IPO).

The Offer is being made through the Book Building Process, wherein not less than 75 per cent of the Offer shall be available for allocation to Qualified Institutional Buyers, not more than 15 per cent of the Offer shall be available for allocation to Non-Institutional Bidders and not more than 10 per cent of the Offer shall be available for allocation to Retail Individual Bidders.

Talking to Bizz Buzz, Mumbai-based IPO observer, BN Kumar, said: "Post-Covid relaxations, the travel and tourism industry is bound to boom. Though travellers are advised to exercise caution in view of the presence of Omicron, business travel is bound to reopen. But in the long-run, the industry is bound to grow with the unprecedented growth of the air travel in particular." Kumar pointed out that India is the world's fastest growing aviation industry with Airbus forecasting that the country will need more than 2,000 aircraft in next 20 years and the government focusing on UDAN services and expanding the airport infrastructure to cover even smaller towns. Business travel to the rapidly growing tier-2, 3 and 4 cities and towns will also grow as these places see growth. Moreover, the government is also keen to develop travel and tourism industry in a big way, he added.

The issue with a face value of one rupee per equity share consists of a fresh issue of equity shares worth up to Rs750 crore and an offer-for-sale (OFS) of up to 9,328,358 equity shares by existing shareholders. The offer of sale comprises up to 8,896,998 equity shares by THCL Travel Holdings Cyprus Limited (Promoter Selling Shareholders) and up to 431,360 equity shares by Pandara Trust – Scheme I through its trustee Vistra ITCL (India) Limited. Additionally, the company, in consultation with the lead bankers to the issue may consider a further issue of equity shares including a private placement aggregating up to Rs145 crore. If such placement is completed, the fresh issue size will be reduced. The issue proceeds will be utilised to the tune of Rs150 crore for strategic investments, acquisitions and inorganic growth, Rs500 crore for investment in customer acquisition and retention, technology, and other organic growth initiatives besides general corporate purposes.

Yatra Online Inc is the parent company of Yatra Online Limited, based in Gurugram, has approximately 700 large corporate customers, and over 46,000 registered SME customers. The company's products and services are divided into three categories: airline tickets, which includes standalone sales of airline tickets as well as travel packages that may include hotel rooms, cruises, travel insurance, and visa processing; hotels and holiday packages, which includes standalone sales of hotel rooms as well as travel packages that may include hotel rooms, cruises, travel insurance, and visa processing; and other services, which includes rail tickets, bus tickets, taxi rentals, and other services. The online travel company provides access to hotels, home stays, and other lodgings through its platform, which are the largest among main OTA competitors, with around 93,500 hotels in approximately 1,400 cities and towns in India and more than two million hotels globally. It is a one-stop store for travellers, offering vacation packages as well as visa assistance, excursions, sightseeing, entertainment, and events. The company competes with other online travel agencies, or OTAs, traditional offline travel companies, travel research companies, payment wallets, search engines, and meta search companies, both in India and abroad, including MakeMyTrip Limited, Cleartrip Private Limited, Easy Trip Planner Limited, Thomas Cook India Limited, FCM Travel Solutions India Private Limited, GBT India Private Limited, CWT India Private Limited, TripAdvisor India Private Limited, TripAdvisor India Private Limited, TripAdvisor India Private Limited, TripAdvisor India.

Yatra Online's revenue from operations during the year FY21 fell 81.37 per cent to Rs125.45 crore from Rs673.33 crore in the previous year, primarily due to the impact of the Covid-19 pandemic, including lower travel demand due to travel restrictions. The Indian travel industry grew at 8-10 per cent CAGR between fiscal 2015 to 2020, to a size of Rs2,470-2,490 billion and is expected to grow annually by 5-7 per cent to Rs 3,350-3,370 billion by fiscal 2025, driven by development of tourism infrastructure, rising income levels translating to higher discretionary spending on travel and tourism, increase in frequency of travel business and leisure purposes, reforms in visa and increase in connectivity across means of transport. SBI Capital Markets Limited, DAM Capital Advisors Limited and IIFL Securities Limited are the book running lead managers for the issue, while Link Intime is the registrar.