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Travel Agency Yatra Embarks on Its INR 750 Crore IPO Journey

Travel Agency Yatra.com Embarks on its INR 750 Crore IPO Journey

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Gurugram-based travel agency Yatra.com, booked its IPO tickets on 28th March 2022 with the Securities and Exchange Board of India (SEBI). Although the dates of its journey are yet to be announced, the company is already registered on the US exchange, Nasdaq, since December 2016 and is now looking to list on the Indian stock exchanges with an initial public offering of INR 750 crores. While other details like issue price and the total size are awaited, we have gathered some key data points from the draft prospectus. But before that, let’s glance at the company’s history and business.

The History of Yatra.com and How the Yatra.com Journey Began

The company was launched in August 2006 by Dhruv Shringi, Sabina Chopra, and Manish Amin with a vision to provide a best-in-class customer experience and the goal to be “India’s Travel Planner”. Yatra.com is India’s second-largest online travel service provider in terms of gross booking revenue and operating revenue as of FY20. By December 2016, Yatra.com went on to get publicly listed on the US stock exchange Nasdaq. Later, in 2021, the company collaborated with brands like Airbnb, Oyo Rooms, and EaseMyTrip to form the Confederation of Hospitality, Technology and Tourism Industry (CHATT) to promote domestic tourism.

Understanding Yatra’s business

Yatra.com is the country’s largest corporate travel services provider and the second-largest online travel company in terms of gross booking revenue and operating revenue. Its go-to-market strategy covers both B2B and B2C channels, which have enabled the company to maximise its customer reach to over 7 million customers, availing a broad spectrum of services offered, such as holiday packages, air ticketing, bus ticketing, rail ticketing, hotel booking, and other supplementary services. Additionally, the company’s large network of travel agents in more than 840 cities has also scaled the business. With over 20,94,000 tie-ups, Yatra boasts the highest number of hotel and accommodations tie-ups in India and globally as of October 29, 2021.

To further encourage repeat usage and customer loyalty to the platform, Yatra has also launched a proprietary eCash loyalty program in 2014, where travellers can accumulate points by booking, which can be redeemed wherever applicable. As of today, there are over 6 million customers who have registered for the eCash loyalty program, and this loyalty program has seen a significant impact on the business.

Key Highlights of the DRHP

According to the DRHP filed, the issue of INR 750 crore comprises a fresh issue as well as an offer for sale of 93,28,358 shares. The OFS includes the sale of 88,96,998 shares by the promoter Travel Holding Cyprus Limited (THCL) and 4,31,360 shares by the investor Pandara Trust.

Of the funds planned to be raised, Yatra.com plans to use INR 150 crores for strategic investments & acquisitions and inorganic growth, INR 500 crores in customer acquisition & retention, technology, and other organic growth purposes, and the remaining amount for general corporate purposes.

The table below displays a brief snapshot of the financials declared in the DRHP for FY 2020 and FY 2021.

Rs. in crores

Particulars 31st March 2021 31st March 2020
Total Assets 562.91 878.07
Total Liabilities 439.42 665.63
Total Income 143.61 694.26
Restated loss (118.87) (69.86)

The Bottom Line

Despite the tourism industry taking a beating due to the pandemic, India ranked seventh worldwide in tourism spend in 2020, which is up to two places from ninth in 2019. The Indian travel industry is anticipated to attain a growth between 5-7% CAGR to INR 3,350 – INR 3,370 billion by 2025 driven by development in tourism infrastructure and rise in income levels, leading to more spending capacity on travelling and leisure. Additionally, the Online Travel Agency (OTA) space in terms of gross booking revenue is expected to grow at 11-13% CAGR to INR 1,680 – INR 1,700 billion between 2020 and 2025.

With the tourism industry revitalising post the COVID-19 pandemic, the Yatra IPO timing seems laudable, while it goes without saying that the company needs to capitalise on the proceeds to stay ahead of the game.

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