RateGain Travel Technologies raised ₹599 crore from anchor investors ahead of IPO

RateGain Travel Technologies raised ₹599 crore from anchor investors ahead of IPO

RateGain Travel Technologies raised ₹599 crore from Government of Singapore, Monetary Authority of Singapore, Nomura, Goldman Sachs Funds, Aditya Birla Sun Life Mutual Fund (MF), ICICI Prudential MF, Sundaram MF, Axis MF, SBI Life Insurance Company, ICICI Prudential Life Insurance Company and BNP Paribas Arbitrag are among the anchor investors, ahead of its IPO (initial public offering). According to a circular posted on the BSE website, the company has decided to allocate 1,40,90,136 equity shares to 34 anchor investors ₹425 each, valuing the transaction at ₹598.83 crore.

RateGain is one of the world’s leading distribution technology companies and India’s largest Software as a Service (SaaS) company in the hospitality and travel industry. Proceeds from the new issue will be used to repay debt owed to Silicon Valley Bank by RateGain UK, one of the subsidiaries; to pay deferred consideration for the acquisition of DHISCO; and to fund strategic investments, acquisitions, and inorganic growth. The funds will also be used to fund technological innovation, artificial intelligence, and other organic growth initiatives, as well as the purchase of certain capital equipment for the data centre and general corporate purposes.

RateGain Travel Technologies is one of the leading distribution technology companies globally and the largest Software as a Service (SaaS) provider in the travel and hospitality industry in India. The firm offers travel and hospitality services across different verticals like hotels, airlines, online travel agents, meta-search companies, package providers, car rentals, cruises, and ferries. The business provides inter-connected products to manage the revenue creation value chain leveraging big data capabilities and integration and over the period, expanded product portfolio to artificial intelligence and machine learning capabilities.

RateGain Travel delivers travel and hospitality technology solutions through the SaaS platform through 3 business units; 1. Data as a Service (DaaS), 2. Distribution, and 3. Marketing Technology (MarTech). As of June 30 2021, the business serves over 1400 customers including 8 Global Fortune 500 Companies. Six Continents Hotels, InterContinental Hotels Group, Kessler Collection, Lemon Tree Hotels, Oyo Hotels, and Homes Pvt Ltd are some of the marquee customers served by the company.

Competitive strengths

• Strong customer base with 1434 customers including 8 Global Fortune 500 Companies as of June 30, 2021.
• Innovative Artificial intelligence-driven industry-relevant SaaS solution provider.
• Comprehensive product portfolio solutions for the travel and hospitality industry.
• Strong financial performance with an established track record of successful acceleration post-acquisition.
• Diversified management team with domain expertise.

Objects of the Issue:

The IPO aims to utilize the net proceed towards the following purposes;

• Repayment and/or prepayment of indebtedness availed by Rategain UK.
• Make payment of deferred consideration for acquisition of DHISCO.
• Strategic investments, acquisition, and inorganic growth.
• To make investment in technology innovation, artificial intelligence, and other organic growth initiatives.
• Purchase capital equipment for the company’s data center, and
• Meet general corporate purposes.

RateGain IPO Review

While this company has been posting losses post-pandemic in line with general trends for the segments, it kept adding its services and has widened its products folio from 4 to 10 during this period. Opening up of the economy will have fast forward mode for travel and hospitality segment which augurs well for this global player. No doubt, the ongoing pandemic scare with a new variant (Omicron) is keeping a tab on the general sentiment, RTTL will emerge as the niche player with its widened product portfolio. Post listing, this company may generate first-mover fancy and gain momentum. Negative earnings are a concern for a while, but keeping future prospects in mind, risk seeker/cash surplus investors may consider an investment with a long term perspective. Others may skip it. Read detail review…

RateGain IPO Subscription Status (Bidding Detail)

The RateGain IPO is subscribed 17.41 times on 12/9/2021 5:00:00 PM. The public issue subscribed 8.08 times in the retail category, 8.42 times in the QIB category, and 42.04 times in the NII category. 

The initial public offer (IPO) of RateGain Travel Technologies will conclude on Thursday. As of 11:23 am, the issue received a 94 per cent subscription on the final day of issuance, data available with the exchanges showed.

 The initial public offer (IPO) of RateGain Travel Technologies will conclude on Thursday. As of 11:23 am, the issue received a 94 per cent subscription on the final day of issuance, data available with the exchanges showed. The ₹ 1,336-crore IPO opened for subscription on December 7.

Qualified institutional buyers (QIBs) was subscribed 3 per cent against the portion set aside for them. The portion of non-institutional investors witnessed 16 per cent subscription, and the employee reserved category saw 79 per cent bookings.

The IPO received a strong response from retail investors and the portion was subscribed 4.86 times (486 per cent).

The company said that the proceeds from the issue will be used for payment of debt availed by RateGain UK, one of the subsidiaries, from Silicon Valley Bank; payment of deferred consideration for the acquisition of DHISCO and strategic investments, acquisitions, and inorganic growth.

Referance link:

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