RateGain IPO: Subscribed 41% On Day 1 Backed By Robust Retail Demand

Travel tech startup RateGain’s initial public offering (IPO) was booked 41% or 0.41 times at the end of the first day of the offer, largely due to strong subscription by retail investors.

Out of the 1,73,51,146 shares on offer, investors have placed bids for 71,88,090 shares, BSE data showed.

The offer opened at the price band of INR 405 – INR 425, will continue till December 9 

The offer includes a fresh issue of shares worth INR 375 Cr and an offer for sale (OFS) of up to 2,26,05,530 shares. 

• At the end of day 1, retail institutional investors (RII) subscribed allocated portion of 31,31,141 shares 2.23 times, thereby placing bids for 69,67,800 shares.
• The non institutional investors (NII) have bid for only 1,75,945 shares (0.04 times or 4%) so far out of the earmarked 46,96,711 shares.
• The employee reserved portion has been subscribed 0.34 times or 34%. Employees bid for 44,345 shares by 5 p.m. on Tuesday (December 7, 2021), while 1,29,870 have been reserved for them.
• Qualified institutional buyers (QIB) who have been allotted majority of shares (i.e. 93,93,424), are yet to pitch in. Institutional investors generally tend to place bids by the third day of the offer.

On Monday, RateGain raised INR 598.83 Cr in the anchor investment from 34 anchor investors at the upper price band of INR 425 per equity share.

Some of the key anchor investors included — the Government of Singapore, Monetary Authority of Singapore, Nomura, ICICI Prudential Mutual Fund, SBI Life Insurance, Nippon Mutual Fund, Pinebridge, Axis Mutual Fund, Birla Mutual Fund and ICICI Prudential Life Insurance.

RateGain’s Offer For Sale

• Private equity firm TA Associates has put 1,71,14,490 shares for sale through its associate Wagner 
• RateGain founder and CMD Bhanu Chopra has offered 40,43,950 shares 
• The founder’s family members Megha Chopra and Usha Chopra, have offered to sell up to 12,94,760 and 1,52,330 equity shares respectively.

Promoters hold a majority stake (68.35%) in the startup including 50.34%, 16.12% and 1.90% stake held by Bhanu Chopra, Meghna Chopra and Usha Chopra respectively.

On the other hand, Wagner holds 16.13% stake in the company.

RateGain: The Financials

For the last financial year (FY21), the Delhi NCR-based startup reported a net loss of INR 28.57 Cr, 42% higher than INR 20.10 Cr of net loss registered in FY20.

Its revenue from operations fell 37% to INR 250.79 Cr in FY21, compared to INR 398.71 Cr reported in FY20.

Founded in 2004 by Chopra, RateGain offers a SaaS product that helps travel and hospitality companies streamline operations and sales. It enables them to determine the right pricing for their products based on the demand, the current market rates that help hotels and booking agents maximise revenue.

Its clientele includes InterContinental Hotels, Lemon Tree Hotels, The Kessler Collection and another IPO-bound travel unicorn OYO Hotels and Homes.

Recent Startup IPO Trends

As its public offering opened today, RateGain joined the list of startups to have gone public of late. 

FSN E-Commerce, the parent company of online lifestyle marketplace Nykaa which witnessed a bumper stock market debut last month had witnessed strong traction among investors right from the start of the offer. At the end of the first day of the offer, the Nykaa IPO was subscribed 1.55 times. 

Fintech unicorn Policybazaar’s IPO was booked nearly 54% or 0.54 times on the first day, while Fino Payments Bank’s offer was booked 0.51 times.

The mega offer of Paytm, was subscribed 18% or 0.18 times on day one.