IPO Analysis

Date Heading Details
07-Dec-2021   12:59 Hrs IST Shriram Properties coming with an IPO to raise upto Rs 627 crore <p align="justify"><strong>Shriram Properties <br></strong></p><ul><li><div align="justify">Shriram Properties is coming out with a 100% book building; initial public offering (IPO) of 5,31,25,975 shares of Rs 10 each in a price band Rs 113-118 per equity share.<br></div></li><li><div align="justify">Not less than 75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors.<br></div></li><li><div align="justify">The issue will open for subscription on December 8, 2021 and will close on December 10, 2021.<br></div></li><li><div align="justify">The shares will be listed on BSE as well as NSE.<br></div></li><li><div align="justify">The face value of the share is Rs 10 and is priced 11.30 times of its face value on the lower side and 11.80 times on the higher side.<br></div></li><li><div align="justify">Book running lead manager to the issue are Axis Capital, ICICI Securities and Nomura Financial Advisory and Securities (India). <br></div></li><li><div align="justify">Compliance Officer for the issue is Duraiswamy Srinivasan.<br></div></li></ul><p align="justify"><strong>Profile of the company<br></strong></p><p align="justify">The company is one of the leading residential real estate development companies in South India, primarily focused on the mid-market and affordable housing categories. It is among the top five residential real estate companies in South India in terms of number of units launched between the calendar years 2012 and the third quarter of 2021 across Tier 1 cities of South India including Bengaluru, Chennai and Hyderabad. It also present in the mid-market premium and luxury housing categories as well as commercial and office space categories in its core markets.<br></p><p align="justify">The company is part of the Shriram Group, which is a prominent business group with four decades of operating history in India and a well-recognized brand in the retail financial services sector and several other industries. Its relationship with the Shriram Group provides it with strong brand recall and that it benefit, and will continue to benefit, from the trust and confidence that homebuyers, lenders, financial investors, landowners, development partners, contractors and other stakeholders place in the Shriram brand and its operational history. The company commenced operations in Bengaluru in the year 2000 and has since expanded its presence to other cities in South India, i.e., Chennai, Coimbatore and Visakhapatnam. In addition, it also has presence in Kolkata in East India, where it is developing a large mixed-use project. Bengaluru and Chennai are two key markets for it. <br></p><p align="justify"><strong>Proceed is being used for:<br></strong></p><ul><li><div align="justify">Repayment and/ or pre-payment, in full or part, of certain borrowings availed by the company and its Subsidiaries, Shriprop Structures, Global Entropolis and Bengal Shriram.<br></div></li><li><div align="justify">General corporate purposes, subject to applicable laws. <br></div></li></ul><p align="justify"><strong>Industry overview<br></strong></p><p align="justify">The residential housing market performed strongly during the quarter ended September 30, 2021, i.e., the third quarter of 2021, with residential unit sales and new launches of residential projects experiencing the strongest results since the outbreak of the COVID-19 pandemic, despite the impact of the second wave during the second quarter of 2021. In particular, greater control over the impact of the pandemic and positive progress of the vaccination program have enabled an early relaxation of the second wave related lockdown initiatives, while learnings gained from similar relaxations during 2020 have assisted property developers to better manage construction and delivery schedules, as well as continue sales activity. India's growth fuelled by increase in service industries, increasing urbanization, improved per capita earnings, decreasing household size and various macro factors have led to growth of residential unit needs. Organized RE growth in large cities and towns has led to quality supply in the sector addressing the needs of all economic strata. Annually the supply across the 7 major cities has been over 130,000 units. <br></p><p align="justify">The residential sector is slowly recovering - 2018 witnessed a rise in residential market activity with over 160,000 new launches as well as 136,000 sales (approximately 70% increase from 2017). However, there was again a drop in supply in year 2019 due to the liquidity issues as lending had slowed down. While the sector was slowly witnessing improvement, year 2020 has again witnessed a decline due to COVID pandemic which resulted in total shutdown in construction activity during the nation-wide lockdown. While the 6-month moratorium on term loans has provided a temporary breather to homebuyers and developers, stressed NBFCs and risk averseness of banks has exacerbated the liquidity crunch for the sector. In terms of residential capital value trends across top 7 cities of India, Mumbai remained at the top of the chart with average capital value upward of Rs 10,000 per sq. ft. The chart below presents capital value trends across top 7 cities of India in the residential market. <br></p><p align="justify"><strong>Pros and strengths</strong></p><p align="justify"><strong>Backed by marquee investors</strong>: The company is part of Shriram Group, which is a prominent business group with four decades of operating history in India and a well-recognized brand in the retail financial services sector and several other industries. The group is funded by marquee global and domestic financial investors across several of its businesses. The Shriram Group's management philosophy is characterized by empowerment of stakeholders and decentralized decision-making by professional management teams. The company benefits from the trust and confidence that homebuyers, lenders, financial investors, land-owners, development partners, contractors and other stakeholders place in the Shriram Group. Its relationship with the Shriram Group provides it with brand recall and the ability to leverage its reputation among stakeholders in performing its business operations.</p><p align="justify"><strong>Leading residential real estate Development Company in South India</strong>: The company is a leading residential real estate development companies in South India, primarily focused on the mid-market and affordable housing categories. The company is among the top five residential real estate companies in South India in terms of number of units launched between the calendar years 2012 and the third quarter of 2021 across Tier 1 cities of South India including Bengaluru, Chennai and Hyderabad. It's completed projects in the cities of Bengaluru and Chennai accounted for 15.18 million square feet, or 90.56% of its total Saleable Area in Completed Projects, as of September 30, 2021. In addition, Ongoing Projects, Projects under Development and Forthcoming Projects in Bengaluru and Chennai accounted for 31.37 million square feet, or 67.15% of its total estimated Saleable Area in these projects, as of September 30, 2021. Bengaluru and Chennai are two key markets in South India, and India generally, contributing to approximately 29.3% of the residential launches and 28.7% of the sold inventory in India's seven cities (Bengaluru, Mumbai, Delhi, Chennai, Pune, Hyderabad and Kolkata), from the calendar year 2012 to the third quarter of 2021.<br></p><p align="justify"><strong>Established strategic relationships:</strong> The company has established relationships with domestic as well as international financial investors, from whom it has been able to procure financial investments for its projects. Investors who have invested in its projects include SUN Apollo India Real Estate Fund I LLC, Mitsubishi Corporation, Amplus Capital Advisors Private Limited, ASK Real Estate Special Opportunities Fund, India Realty Excellence Fund II LLP managed by Motilal Oswal Real Estate Investment Advisors II and Kotak Affordable India Fund (a joint investment vehicle focused on investing into affordable housing projects between CDC of UK and Kotak Alternative Investment Managers), and include certain investors who have made multiple investments in its completed and ongoing projects. This approach has enabled the company to raise capital through investments from financial investors in order to fund growth, expand the scale of its projects and reduce debt exposure, while also benefitting from the know-how and strategic inputs of such investors. Other than its strong association with investors, it also has well-established relationships with several lenders, including public and private sector banks and NBFCs, across its projects.<br></p><p align="justify"><strong>Scalable and asset light business model</strong>: The company's business model relies on the strength of its brand, project execution and management capabilities as well as its well-established relationships with landowners, development partners, financial investors, architects and contractors. Leveraging these capabilities and relationships, The company is transitioning from a real estate development model to a combination of real estate development and real estate services based business model. This transition will help improve margins and profitability as well as return on capital, given low capital-intensive nature of its newer business model. As part of this model, its focus is on DM or joint development agreements with landowners/developers or joint ventures, which requires lower upfront capital expenditure compared to direct acquisition of real estate or land parcels. The company has launched 11 projects under the DM portfolio with a Saleable Area of 6.42 million square feet as of September 30, 2021. Its pre-sales volume from the DM model for the six months ended September 30, 2021 and 2020, Financial Years 2021, 2020 and 2019 were 0.79 million square feet, 0.29 million square feet, 1.05 million square feet, 0.83 million square feet and 0.69 million square feet. Company's asset light business model will result in efficient utilization of capital resulting in lower debt and regular fee income, allowing it to have higher return on capital employed.<br></p><p align="justify"><strong>Risks and concerns<br></strong></p><p align="justify"><strong>Profitability significantly dependent on performance of real estate market in India</strong>: The company's success of its projects depends on the general economic, demographic and political conditions in India, as well as the performance of the real estate market generally in India, and particularly in South India, where majority of its projects are located. In addition, the condition of the real estate sector in India, particularly market prices for developable land and finished units and projects, has a significant impact on its revenues and results of operations. The real estate market may particularly be adversely impacted due to lack of housing finance for potential or existing customers. The real estate market may be affected by various factors outside its control, such as prevailing local and economic conditions, changes in the supply and demand for properties comparable to those it develop, lack of financing for real estate projects, change in demographic trends, employment and income levels, rising interest rates, changes in the applicable governmental regulations, decrease in or restrictions on foreign currency remittances, regional natural disasters, pandemics such as coronavirus disease (COVID-19) performance of key industrial sectors, or the public perception that any of these events may occur. These factors may contribute to fluctuations in real estate prices, rate of sales and the availability of land and can adversely affect the demand for, and pricing of, its Completed Projects (unsold), Ongoing Projects, Projects under Development and Forthcoming Projects, as well as adversely affect the value of its land reserves, and, as a result, may adversely affect its financial condition, results of operations, cash flows.<br></p><p align="justify"><strong>Company's business geographically concentrated in South India</strong>: The company's real estate development activities are geographically concentrated in the cities of Bengaluru, Chennai, Vishakhapatnam and Coimbatore, which are located in South India. As of September 30, 2021, 24 Ongoing Projects, four Projects under Development and four Forthcoming Projects, representing 77.91% of estimated Saleable Area for its Ongoing Projects, Projects under Development and Forthcoming Projects, are located in South India. Within South India, as of September 30, 2021, 63.72%, 22.46%, 12.24% and 1.58% of its total estimated Saleable Area for its Ongoing Projects, Projects under Development and Forthcoming Projects, is located in Bengaluru, Chennai, Vishakhapatnam and Coimbatore, respectively. The company cannot assure that the demand for its projects in key cities where it are present, such as Bengaluru, Chennai, Vishakhapatnam, Coimbatore and Kolkata will grow, or will not decrease, in the future. Consequently, it business, results of operations, cash flows and financial condition have been and will continue to be heavily dependent on the performance of the real estate market in South India.<br></p><p align="justify"><strong>Company and some of its Subsidiaries have unsecured loans</strong>: The Company and some of its Subsidiaries have currently availed unsecured loans which may be recalled by the lenders at any time. As of September 30, 2021, the unsecured loans of the company and its subsidiaries (subsidiaries as defined in its Restated Financial Statements) that may be recalled at any time by the lenders aggregated to Rs 76.37 crore, which constituted approximately 10.99% of the total indebtedness of the Company and its subsidiaries. In the event that any lender seeks a repayment of any such loan, the company would need to find alternative sources of financing, which may not be available on commercially reasonable terms, or at all. The company may not have adequate working capital to undertake new projects or complete the Ongoing Projects, and, as a result, any such demand by the lenders may affect its business, cash flows, financial condition and results of operations.<br></p><p align="justify"><strong>Financing agreements impose certain restrictions on operations</strong>: The company's financing arrangements impose restrictions on the utilization of the loan for certain specified purposes only, such as for the purposes of meeting expenses for development and related activities. The company are required to obtain prior consent from some of its lenders for, among other matters, amending its articles of association, altering its capital structure and shareholding pattern, changing the composition of its management or Board of Directors or its management set-up, undertaking mergers or amalgamations, changing its constitution, making certain categories of investments, declaring dividends, making certain payments (including payment of dividends, redemption of shares, prepayment of indebtedness, payment of interest on unsecured loans and investments), undertaking any scheme of expansion or diversification, effecting any change in the nature or scope of its projects or any change in the financing plan, creation of security interest in secured properties and raising further indebtedness. The company may also be required to comply with financial covenants stipulated by its financing documents.<br></p><p align="justify"><strong>Outlook</strong><br></p><p align="justify">Shriram Properties is a part of the Shriram Group and is one of the leading residential real estate development companies in South India. The company primarily focuses on the mid-market and affordable housing segments. The company is also present in the mid-market premium and luxury housing categories as well as commercial and office space categories. Bengaluru and Chennai are the key markets for the company. The company also has operations in Coimbatore, Visakhapatnam, and Kolkata. It is transitioning from a real estate development model to a combination of real estate development and real estate services based business model, with a shift towards an asset light business strategy. It has established relationships with domestic as well as international financial investors, from whom it has been able to procure financial investments for its projects. On the concern side, the company's business faces competition from both national and local property developers with respect to factors such as location, facilities and supporting infrastructure, services and pricing. Intensified competition between property developers may result in increased land prices, oversupply of properties, lower real estate prices, and lower sales at its properties, all of which may adversely affect its business. Also, the company's inability to provide customers with quality construction or its failure to continually anticipate and respond to customer needs may affect its business and prospects and could lead to the loss of significant business to its competitors. <br></p><p align="justify">The issue has been offered in a price band of Rs 113-118 per equity share. The aggregate size of the offer is around Rs 600.32 crore to Rs 626.88 crore based on lower and upper price band respectively. On performance front, the company's total income decreased by 20.66% to Rs 501.31 crore for the financial year 2021 from Rs 631.84 crore for the financial year 2020, due to decrease in revenue from operations and other income. The company's loss was Rs 68.18 crore for the financial year 2021 compared to loss of Rs 86.43 crore for the financial year 2020. The company intends to continue to strengthen its reputation and track record in the mid-market and affordable housing categories, in order to deliver cost effective housing solutions to its customers. It intends to leverage its existing market position, competitive strengths and understanding of customer preferences to deepen its penetration in mid-market and affordable housing category. It intends to continue to focus on key cities in which it is present, such as Bengaluru and Chennai, where it has established a strong presence and developed in depth local knowledge and relationships.</p>
06-Dec-2021   15:04 Hrs IST Rategain Travel Technologies coming with an IPO to raise upto Rs 1355 crore <p align="justify"><strong>Rategain Travel Technologies<br></strong></p><ul><li><div align="justify">Rategain Travel Technologies is coming out with a 100% book building; initial public offering (IPO) of 3,18,78,318 shares of Rs 1 each in a price band Rs 405-425 per equity share.<br></div></li><li><div align="justify">Not less than 75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors.<br></div></li><li><div align="justify">The issue will open for subscription on December 7, 2021 and will close on December 9, 2021.<br></div></li><li><div align="justify">The shares will be listed on BSE as well as NSE.<br></div></li><li><div align="justify">The face value of the share is Rs 1 and is priced 405 times of its face value on the lower side and 425 times on the higher side.<br></div></li><li><div align="justify">Book running lead manager to the issue are Kotak Mahindra Capital Company, IIFL Securities and Nomura Financial Advisory and Securities (India).<br></div></li><li><div align="justify">Compliance Officer for the issue is Sachin Verma. <br></div></li></ul><p align="justify"><strong>Profile of the company<br></strong></p><p align="justify">The company is among the leading distribution technology companies globally and it the largest Software as a Service (SaaS) company in the hospitality and travel industry in India. It offer travel and hospitality solutions across a wide spectrum of verticals including hotels, airlines, online travel agents (OTAs), meta-search companies, vacation rentals, package providers, car rentals, rail, travel management companies, cruises and ferries. It is one of the largest aggregators of data points in the world for the hospitality and travel industry. It offer a suite of inter-connected products that manage the revenue creation value chain for its customers by leveraging its big-data capabilities and integration with other technology platforms helping hospitality and travel providers acquire more guests, retain them via personalized guest experiences and seek to maximize their margins. <br></p><p align="justify">In a highly fragmented landscape of travel technology providers, the company offers a platform that bridges the data gap across the hospitality and travel industry. It provide inter-operable products that leverage data across internal and external sources, unlock value through integration and enable better, faster and automated decision making. Its solutions help hospitality and travel and companies find the right guest, decide the right price, distribute it to the preferred channel of the guest and once converted, helps them have an exceptional experience. <br></p><p align="justify"><strong>Proceed is being used for:</strong></p><ul><li><div align="justify">Repayment/prepayment of indebtedness availed by RateGain UK, one of its Subsidiaries, from Silicon Valley Bank.<br></div></li><li><div align="justify">Payment of deferred consideration for acquisition of DHISCO.<br></div></li><li><div align="justify">Strategic investments, acquisitions and inorganic growth.<br></div></li><li><div align="justify">Investment in technology innovation, artificial intelligence and other organic growth initiatives.<br></div></li><li><div align="justify">Purchase of certain capital equipment for its Data Center.<br></div></li><li><div align="justify">General corporate purposes.<br></div></li></ul><p align="justify"><strong>Industry overview<br></strong></p><p align="justify">The tourism industry represented 10.4% of global GDP in 2019 and continues to be one of the largest industries worldwide. Like many industries, success as a supplier of travel services relies on many things, but once you have settled on the product you want to sell, some of the most important elements are: (1) distribution, (2) the ability to attract customers, (3) pricing and revenue management. Distribution in the travel world refers to all the mechanisms that lead to the display of a supplier's product on a for sale “shelf.” Electronic distribution began back in the 1960s and along the way, a vast network of intermediaries sprang up to take advantage of opportunities to streamline connections, provide new capabilities or obtain advantaged pricing. The result is a labyrinthine mass of connectivity options between suppliers and distributors, each with its own pros and cons, capabilities and deficits. Complex distribution systems allow for lots of anomalies, and without a disciplined distribution strategy and careful monitoring, it's easy to lose sales or encounter suboptimal profitability. Making decisions about where to distribute, how to distribute, and how to price your products is a daunting task.<br></p><p align="justify">Within the hotel industry, distribution is considered to be communication of sales-oriented information about a hotel. This encompasses its presence, facilities, brand affiliation (if it has one), accommodation availability and rates&nbsp;- conveyed in words, photos and videos&nbsp;- to form a positive perception of the hotel in the mind of the information recipient (the potential guest), and to prompt a reservation request. Yet even though hotels have embraced technology for distribution, they remain a laggard for overall digitization, an increasingly important competitive requirement. The upside opportunity is very significant.&nbsp; Traditionally, hotel operators have focused on “High Touch”; “High Tech” was regarded as a potential distraction from, if not an outright threat to successful guest service delivery. In the global hotel industry, “High Touch, not High Tech” has been replaced by “High Touch through High Tech”. The following paragraphs discuss the technologies, and specific hotel systems, that hotel operators are using to meet their guest service and business performance goals.</p><p align="justify"><strong>Pros and strengths<br></strong></p><p align="justify"><strong>Marquee global customers with long-term relationships</strong>: The company has global and diverse customer base with whom it have long-standing relationships. As of September 30, 2021, its customer base of 1,462 customers including eight Global Fortune 500 companies comprised both travel suppliers and travel intermediaries including airlines, hotels, cruise lines, car rental companies, online travel agents, tour operators and wholesalers. Its customers include 25 out of the top 30 OTAs, several of the world's fastest-growing airlines, 23 of the top 30 hotel chains, tour operators and wholesalers, all leading car rental companies, all large cruise lines, and the largest travel management companies. In the hotel segment, the company works primarily with large and mid-size chains including the InterContinental Hotels Group, Kessler Collection, luxury hotel chain, Lemon Tree Hotels and Oyo Hotels and Homes along with independent hotels. Besides hotels, the company also works with leading OTAs such as GroupOn. Its customer base grew from 1,190 Active Customers as of March 31, 2019 to 1,274 Active Customers as of March 31, 2020 and to 1,337 Active Customers as of March 31, 2021 and the company had 1,462 Active Customers as of September 30, 2021, as a result of its sales and marketing efforts. The company serves customers in over 110 countries, as of September 30, 2021 including in other parts of Asia, Europe and the United States.<br></p><p align="justify"><strong>Innovative AI driven industry relevant SaaS solutions</strong>: The company offers a comprehensive platform of industry-specific solutions with growth and monetization capabilities. Product and technology innovation is at the core of its success. Given the fragmented nature of the hospitality and travel industry, the company has developed products that are inter-operable and integrate across a single platform allowing customers to maximize their revenues while also resulting in cost savings. The company has built its proprietary AI algorithms and applied it in connection with its SaaS products to provide its customers with next generation of product features. Its suite of products for rate intelligence include OPTIMA, Parity+, AirGain, CarGain and FerryGain that offer customers competitive pricing intelligence leveraging an AI-powered data platform while tracking real-time parity with features such as advanced dashboards, identification of key violators and reasons, revenue leakage. Its revenue optimization products, Rev.AI offer revenue management through historical pricing insights. Its products are enabled with an intuitive user interface, offer a high degree of personalisation at a subscriber level and break down market rate and pricing strategy into logical insights.<br></p><p align="justify"><strong>Diverse and comprehensive portfolio of revenue maximization</strong>: The company has developed a comprehensive product portfolio that caters to the technology ecosystem for the hospitality and travel industry and in particular, to enterprise and mid-market customers for revenue management decision support, competitive intelligence, distribution and social media marketing, online reputation and brand engagement. The company has, over the years grown its operations and the scale of its operations allows customers globally to streamline their operations and increase revenues. The company offers a wide range of travel and hospitality solutions across the spectrum of verticals: hotels, airlines, OTAs and METAs, vacation rentals, package providers, car rentals, rail, travel management companies, cruises and ferries. The company frequently contributes to the travel recovery index published by one of the largest travel industry intelligence platform providing insights to key sectors of travel. </p><p align="justify"><strong>Strong financial performance with track record of successful acceleration post acquisitions</strong>: The company has maintained focus on capital efficiency and has grown without incurring material indebtedness, its conservative approach of operating with low debt has enabled it to remain in a good position during the COVID-19 crisis. Its balance sheet position enables it to make strategic investments by acquiring stakes in certain companies, and consolidate its position by acquiring brands, complementary technologies and product lines. It has established a track record of successful inorganic growth through strategic acquisitions to supplement its product offerings, diversify its revenue streams, and integrate such acquired businesses to further strengthen its portfolio. It has historically introduced operating efficiencies, revenue growth and/or increased profitability in its acquired businesses, resulting in increased operating margins. <br></p><p align="justify"><strong>Risks and concerns<br></strong></p><p align="justify"><strong>Business depends on customers renewing their contracts</strong>: The company's ability to maintain continuing relationships with its customers is essential to the growth, profitability and its results of operations. In order to maintain or improve the results of operations, it is important that the company establish, maintain and expand its relationships with new and existing customers and that its existing customers renew their contracts when the contract term expires or otherwise expand the scope of their contracts with the company. Some of its customers have in the past elected, and may in the future elect, not to renew their contracts with the company or otherwise reduce the scope of their contracts. In addition, the company does not have any exclusive arrangements with its customers. The growth of its business depends in part on its customers expanding their use of products and solutions, which can be difficult to predict.<br></p><p align="justify"><strong>Market for SaaS solutions in hospitality and travel industry is new and evolving</strong>: The company's large majority of revenue comes from contracts in relation to its SaaS products and the company's success and growth will depend to a large extent on the widespread acceptance and adoption of SaaS solutions in general, and of DaaS, Distribution and MarTech products in particular. The company's advertisement and sales promotion expenses towards SaaS products was 1.79%, 1.63%, 0.22%, 0.38% and 4.06% respectively, of company's total revenue from operations in Fiscals 2019, 2020 and 2021, the five months ended August 31, 2020 and August 31, 2021, respectively. The market for SaaS solutions in the hospitality and travel industry is relatively new and rapidly evolving, and if this market fails to grow or grows more slowly than currently anticipate, demand for SaaS products could be adversely affected. The travel SaaS solutions market is subject to rapidly changing user demand and trends and as a result it is difficult to predict enterprise adoption rates and demand for SaaS products, the future growth rate and size of market or the impact of competitive solutions.<br></p><p align="justify"><strong>Subject to certain liability as part of contracts with customers:</strong> As part of contracts that the company enter into with its customers, are subject to indemnification obligations or are liable in the event the company are unable to comply with its obligations under such contracts and in particular in relation to violation of third party intellectual property rights. The company's liability under such contracts is typically limited up to an amount equivalent to 50% of the service fees paid to the company in the last 12 months prior to the liability arising or in certain instances is capped to $100. While there have not been any instances in the past where the company has been required to indemnify its customers, make payments on account of termination of contracts or make any royalty payments to third parties, there can be no assurance that the company will not be subject to similar payment obligations in the event of termination of its contracts.<br></p><p align="justify"><strong>Exchange rate fluctuations may adversely affect results of operations</strong>: The company is exposed to foreign exchange related risks as a significant portion of its revenue from operations are in foreign currency, including the US Dollar, Euro and Pound Sterling. Revenues from sale of services outside India was Rs 2,57.68 crore, Rs 3,94.99 crore, Rs 2,48.89 crore, Rs 97.07 crore and Rs 1,24.48 crore, and represented 98.51%, 99.07%, 99.24%, 99.15% and 99.37% respectively, of its total revenue from operations in Fiscals 2019, 2020 and 2021, and the five months ended August 31, 2020 and August 31, 2021, respectively. A portion of its expenses, including salaries and wages payable and rental expenses, are denominated in currencies other than Indian Rupees. Although its global operations provide some degree of natural hedging, its operations are exposed to exchange rate fluctuations. The company may also be required to make provisions for foreign exchange differences in accordance with accounting standards, particularly when preparing its consolidated financial statements, given its financial statements for its various international subsidiaries are in foreign currency and are required to be converted to Indian Rupees at a period end exchange rate.<br></p><p align="justify"><strong>Outlook</strong><br></p><p align="justify">Rategain Travel Technologies is one of the leading distribution technology companies globally and the largest Software as a Service (SaaS) provider in the travel and hospitality industry in India. The firm offers travel and hospitality services across different verticals like hotels, airlines, online travel agents, meta-search companies, package providers, car rentals, cruises, and ferries. The business provides inter-connected products to manage the revenue creation value chain leveraging big data capabilities and integration and over the period, expanded product portfolio to artificial intelligence and machine learning capabilities. The company's product development philosophy is based on helping drive scale and reducing the total cost of ownership for its customers by building cloud-first products and following agile development practices. It provides competitive intelligence and parity intelligence to help hotels and travel suppliers stay competitive and optimize their revenues. On the concern side, the company may be required to change its pricing model from time to time, including as a result of competition, global economic conditions, general reductions in its customers' spending levels, pricing studies, or changes in how its products are broadly consumed. Besides, the software underlying the company's platform and products, particularly in its DaaS and Distribution business, is complex and may contain design issues, defects or errors, that could be difficult to detect and correct, particularly when first introduced or when new features or capabilities are released. </p><p align="justify">The issue has been offered in a price band of Rs 405-425 per equity share. The aggregate size of the offer is around Rs 1291.07 crore to Rs 1354.82 crore based on lower and upper price band respectively. On performance front, total income decreased by 42.29% from Rs 457.61 crore in Fiscal 2020 to Rs&nbsp; 264.09 crore in Fiscal 2021 primarily due to the impact of the COVID-19 pandemic and its effect on its customers in the travel and hospitality sector. The company recorded a loss for the year of Rs 28.57 crore in Fiscal 2021 compared to Rs 20.10 crore in Fiscal 2020. The company will continue to expand its enterprise sales infrastructure in specific segments to increase its penetration in areas such as MarTech and certain categories within DaaS and Distribution. It intends to leverage its portfolio of products and products under development to provide additional solutions to its existing customers. It also plans to expand into adjacent verticals within the travel industry that rely on the same product set to guide their businesses. It intends to leverage its well-entrenched relationships with its customers to add additional verticals that will allow it to grow its revenues at minimal customer acquisition costs. It will look to expand further into the car rental segment. <br></p>
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