Yatra Online IPO Subscribed 1.61 times at close

The ₹775 crore of Yatra Online IPO, consisted of a combination of fresh issue and offer for sale. The fresh issue was to the tune of ₹602 crore while the offer for sale (OFS) was worth ₹173 crore. The IPO pricing was done in the band of ₹135 to ₹142 per share with the final price to be discovered through the process of book building. The overall response was quite lacklustre. While the retail and QIB portion could manage to sail through, the HNI / NII portion got undersubscribed getting just 42% response due to absence of funding IPO demand and corporate demand. In fact, the QIB portion got fully subscribed only on the last while the retail portion just managed to get subscribed on the second day. As a result, even the overall IPO got fully subscribed on the last day of the IPO. The table below captures the day-wise progress in IPO subscription.

As can be seen from the above table, the overall IPO got just 1.61 times subscribed at the close of the third and final day of the IPO on 20th September 2023.

Rapid update on the overall IPO response

The IPO saw fairly tepid on Day-1 and Day-2 of the IPO and closed with tepid response across categories, despite relatively strong anchor book subscriptions. In fact, the company got fully subscribed only on the last day of the IPO. As per the combined bid details put out by the BSE at the close of Day-3, Yatra Online Ltd IPO was subscribed just 1.61X overall, with relatively better demand coming from the QIB segment and the retail segment while the HNI / NII segment got subscribed just about 42%. Firstly, let us look at the overall allocation.

As of close of 20th September 2023, out of the 309.42 lakh shares on offer in the IPO, Yatra Online Ltd saw bids for 498.92 lakh shares. This implies an overall subscription of just 1.61X overall. The granular break-up of subscriptions was in favour of retail and QIB investors while the HNI / NII investors portion got just about 42% subscription. Even the typical last day demand for the HNI segment and the QIB segment was largely missing in the issue of Yatra Online Ltd. Here are the details of the category-wise subscription.

Subscription status of QIB Portion

On 14th September 2023, Yatra Online IPO completed the bidding for its anchor allocation. There was a strong and robust response as the anchor investors participated through the process of book building. A total of 2,45,59,860 shares were allotted to a total of 33 anchor investors. The allocation was done at the upper IPO price band of ₹142 (including premium of ₹141 per share) which resulted in an overall allocation of ₹348.75 crore. The anchors absorbed 45% of the total issue size of ₹775 crore. Listed below are the 13 anchor investors who got allotted more than 3% each of the anchor shares in the IPO of Yatra Online Ltd. These 13 anchor investors listed below accounted for 72.24% of the total anchor allocation of Yatra Online Ltd; setting  the tone for retail participation in the IPO.

Data Source: BSE Filings

The QIB portion (net of anchor allocation as explained above) had a quota of 167.48 lakh shares of which it has got bids for 343.87 lakh shares at the close of Day-3, implying a subscription ratio of 2.05X for QIBs at the close of Day-3. QIB bids typically get bunched on the last day and while the heavy demand for the anchor placement had given an indication of the institutional appetite for the Yatra Online Ltd IPO subscription overall, the actual demand in the IPO did not live up to the expectations.

Subscription status of HNI / NII Portion

The HNI portion got subscribed just 0.42X (42%) (getting applications for 35.42 lakh shares against the quota of 85.16 lakh shares). That is a very tepid response at the close of Day-3 largely because this segment normally sees the maximum response bunched on the last day. Bulk of the funded applications and corporate applications, come in on the last day of the IPO, and that was just absent in this issue, which led to the undersubscription of the HNI / NII portion of the IPO.

Now the NII/HNI portion is reported in two parts viz. bids below ₹10 lakhs (S-HNI) and bids above ₹10 lakhs (B-HNI). The bids above the ₹10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above ₹10 lakh bid category got subscribed 0.49X while the below ₹10 lakh bid category (S-HNIs) got subscribed 0.27X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Subscription status of Retail Individuals

The retail portion was subscribed just 2.11X at the close of Day-3, showing relatively tepid appetite. It must be noted that retail allocation is 10% in this IPO. For retail investors; out of the 56.78 lakh shares on offer, valid bids were received for 119.64 lakh shares, which included bids for 106.57 lakh shares at the cut-off price. The IPO is priced in the band of (₹135 to ₹142) and has closed for subscription as of the close of Wednesday, 20th September 2023.

Brief on the business model of Yatra Online Ltd

Yatra Online Ltd was incorporated in 2005 to provide pricing data, booking availability details and transaction booking facilities on the internet. Yatra Online Ltd has been one of the oldest ecommerce platforms on the internet in terms of ticketing in India. It provides domestic and international ticketing on Indian and global carrier flights through its online booking platform. In addition, Yatra Online Ltd also provides booking for railways, cab bookings, ancillary services as well as for hotels and other facilities at one single spot. It syndicates rooms from more than 105,000 hotels located across more than 1,490 towns and cities across the length and breadth of India. In addition, it also offers access to more than 2 million hotels for global bookings. Apart from the web platform Yatra.com, the company also offers an app based software for customers as well as a SAAS application for B2B usage among corporates and other associated platforms.

The hotel properties offered by Yatra Online Ltd will be a combination of hotels and homestay facilities. It also offers freight forwarding under the banner of Yatra Freight, mainly targeted at corporate B2B customers. Considering its flexible and scalable platform, Yatra Online Ltd has B2C and B2B customers on its client roster. It broadly focuses on the educated urban customer looking at quality travel at an economical cost. These customers also tend to be frequent flyers and high spenders. Apart from the retail online customers, Yatra Online Ltd also has more than 813 corporate customers complemented by nearly 50,000 SME customers for its services. It ranks as the third largest online ticketing company in terms of revenues.

The fresh funds will be allocated towards strategic growth, branding, inorganic acquisitions and for building the technology stack. The IPO will be lead managed by SBI Capital Markes, DAM Capital Advisors (formerly IDFC Securities) and IIFL Securities. Link Intime India Private Ltd has been appointed the registrar to the IPO.