Yatra Online makes weak debut; lists at 10% discount

Shares of Yatra Online, a homegrown online travel agency and travel search engine, made a weak debut on the domestic bourses on Thursday amid bearish trend in the broader market. The shares of Yatra Online were listed at ₹127.5 apiece on the NSE, a discount of 10.2% over the issue price of ₹142. On the BSE, the travel stock opened 8.45% lower at ₹130 against the IPO price.

After listing, Yatra Online shares saw some recovery, albeit in negative terrain, to touch ₹137.90 and ₹137.75 levels on the NSE and the BSE, respectively. The market capitalisation stood at ₹2,131 crore at the time of reporting.

According to an analyst at Swastika Investmart, the negative listing was due to the company's high price-to-earnings (PE) valuation, as well as its reliance on the airline ticketing business and the competitive nature of the travel industry.

“Yatra Online’s shares witnessed a negative listing. This is likely due to the company's high P/E valuation, its reliance on the airline ticketing business, and the competitive nature of the travel industry. Overall, YOL is a risky investment, and investors who receive an allotment of this IPO should consider exiting their position,” says Shivani Nyati, Head of Wealth, Swastika Investmart.

The ₹775-crore initial public offering (IPO) of Yatra Online, consisting of fresh issue worth ₹602 crore and the offer for sale (OFS) of ₹173 crore, was subscribed 1.61 times, which opened between September 15 and September 20. Ahead of the IPO, the company raised ₹348.75 crore from anchor investors. 

The IPO, having a band of ₹135 to ₹142 per share, received lackluster response from investors. The public issue was subscribed 2.11 times in retail and 2.05 times in qualified institutional buyers (QIB) categories. The non-institutional investors (NIIs) portion was booked 42%. The company had reserved 75% of the issue for QIB, 15% for NII, and 10% for retail investors.

Incorporated in 2005, Yatra Online is one of the oldest e-commerce platforms in terms of ticketing in India, providing pricing data, booking availability details and transaction booking facilities. It is India’s largest corporate travel services provider in the number of corporate clients and the third largest online travel company in India among key OTA (online travel agency) players in terms of gross booking revenue and operating revenue for fiscal year 2023, according to the CRISIL report. The company says it has the largest number of hotel and accommodation tie-ups among key domestic players at 2,105,600 as of March 31, 2023.

The company's air ticketing revenue surged to ₹5,640 crore in the fiscal year 2023, up from ₹2,764 crore in the fiscal year 2022. Hotels and packages revenue was recorded at ₹815.3 crore in FY23, up from ₹347.8 crore in FY22. 

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