RateGain Shares End Nearly 20% Below Issue Price On Market Debut

After listing at a discount, share price of travel tech startup RateGain declined further in its maiden trading session on Friday.

Shares of the startup closed at INR 340.50 on the BSE, lower by INR 84.50 or 19.88% compared to its issue price of INR 425 per share.

On the National Stock Exchange, its shares closed at INR 337.55, lower by INR 87.45 or 20.58% from the listing price. 

Earlier in the day, shares of the company listed at a discount of 15.29% on the NSE and 14.16% on the BSE.

Recent grey market premiums, however, suggested a listing with premium for the RateGain shares.

Santosh Meena, head of research at Swastika Investmart Ltd said, “The timing of RateGain IPO doesn’t fit despite most of the IPOs are witnessing a handsome return because Covid is hurting its business in the near term while worry of Omicron variant is another challenge.”

He added that the long term outlook of the company is promising and long-term investors can stay invested. New investors can look for entry opportunities at 25-30% correction, Meena said.

The IPO closed on December 9th, 2021 and was subscribed 17.41 times. 

The retail portion was subscribed 8.08 times while the qualified institutional buyers booked their allotted portions 8.42 times. The non institutional investors (NII) which largely include corporates and high net worth individuals subscribed the earmarked portion 42.04 times.

The offer opened at the price band of INR 405 – INR 425 on Tuesday, December 7, 2021.

On December 6th, 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 in the round were 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.

FY21 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 to maximise revenue.

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

Startups Going Public

FSN E-Commerce, the parent company of online lifestyle marketplace Nykaa witnessed a bumper stock market debut last month as it listed with 79% premium. 

Fintech unicorn Policybazaar’s shares got listed with a 17% premium on the domestic exchanges. The shares of Fino Payments Bank however, witnessed a weak debut with a discount of over 5%.

The mega listing of Paytm, too saw weak performance. Its shares debuted with a discount of around 9%.

Digital mapping startup MapmyIndia, which witnessed a massive 154 times subscription of its IPO during December 9-13, is scheduled to get listed on the exchanges by Tuesday, December 21, 2021.