Yatra Closes $11.5 Mn Public Offering After Cancelling Ebix Merger

Gurugram and New York-headquartered online travel aggregator Yatra has announced that it has closed its previously announced underwritten public offering at $11.5 Mn.

The company had offered 14,375,000 of its ordinary shares, which includes the exercise in full of the underwriter’s option to purchase an additional 1,875,000 ordinary shares, at a public offering price of $0.80 per ordinary share, less underwritten discounts and commissions. 

H.C. Wainwright & Co. acted as the sole book-running manager for the offering. The gross proceeds of the offering were $11.5 Mn, prior to deducting underwriting discounts and commissions and offering expenses. Yatra said it intends to use the net proceeds from this offering for general corporate and business purposes.

Founded in August 2006 by Sabina Chopra, Manish Amin and Dhruv Shringi, Yatra provides a full range of travel-related services such as domestic and international air ticketing, hotel booking, homestays, holiday packages, bus ticketing, rail ticketing, activities, attractions and ancillary services.

The company claims to have tie-ups with 70K hotels in India and nearly 800K hotels across the world. It is backed by IDG Ventures, Vertex Venture Management, Norwest Venture Partners and other investors.

In 2019, Ebix had agreed to buy Yatra at an enterprise value of $337.8 Mn. Yatra, while cancelling the merger deal earlier this month, filed a plea seeking ‘substantial’ damages for Ebix’s alleged breach of deal terms.

Yatra said that it believes it has a strong financial position to support the company in the coming quarters. The company pointed out that it has a total available liquidity of $32.5 Mn as of June 4, 2020, while its monthly run-rate operating fixed cost was approximately $1.2 Mn, excluding any litigation-related expenses. This means that the company claims to have enough runway to last for at least 26 months.  

The company undertook some major changes at the outset of the financial year 2020. These include, outsourcing call-centre operations and optimising marketing spend, among others. Yatra claimed that initiatives such as headcount rationalisation and reduction in customer promotions in B2C hotels further helped reduce the cost structure of the business.

These initiatives include reducing management salaries by 50%, variable reduction in salaries of 25-75% across verticals, freezing salary hikes, renegotiating payment terms and conditions with suppliers and landlords, revising marketing spend to align with revenue.

Yatra CEO Dhruv Shringi recently said that the domestic travel would come by gradually and by the same time next year, he expects the firm to hit pre-Covid run rates. Pick up in international travel would depend on macro factors like the progress on the development of a vaccine and the differing policies of each country, he said. Overall, he added that the business may be able to come to pre-Covid run rate by mid-2021 if a vaccine comes by the end of 2020.