three days Initial Public Offering (IPO) RateGain Travel Technologies is set to open for public subscription today which ends on December 9th. Software-as-a-Service (SaaS) company has fixed a price band 405-425 per share. the company that picked up 599 crore from anchor investors before its share sale.
The travel and hospitality technology services provider’s IPO includes fresh issue of equity shares of up to 375 crore and offer for sale (OFS) of 2.26 crore equity shares by promoters and existing shareholders.
RateGain shares are earning a premium, according to market observers 85. The company plans to list its shares on the major stock exchanges NSE and BSE on 17th December in the gray market.
Prabhudas Lilladher recommends subscribing for long-term gains as the brokerage believes that “in a highly fragmented market, the company will be able to maintain wallet shares given its comprehensive, interoperable, innovative industry specific solutions and marquee client base.” Well positioned to capture. Technology adoption is on the rise. Rising demand from third-party technology vendors in the T&H industry and due to COVID, doubles serviceable market to $8.45 billion in CY25E for RateGain likely to reach.
RateGain is one of the leading distribution technology companies globally and the largest software as a service (SaaS) company in the hospitality and travel industry in India.
Proceeds from the new issue will be used to pay off a loan taken by RateGain UK, one of Silicon Valley Bank’s subsidiaries, as well as the acquisition of Dhisco and deferred consideration for strategic investments, acquisitions and inorganic growth .
Considering the unique business propositions with high growth potential, minimal competition and valuation facility, the people of Reliance Securities also recommend to subscribe with a long term perspective.
“Retgain’s profitability has not been encouraging over the years, due to acquisitions of loss-making entities and high depreciation (loss of goodwill). The company’s EBITDA margins and net losses continue to decline. Adjusted EBITDA, however, is in the double digits. RateGain is seeing 20% EBITDA margin in the coming years led by product penetration, cross-sell and innovative launches of new products,” added Reliance Securities’ note.
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