India's online travel agency, Yatra Online, is gearing up for its initial public offering (IPO) scheduled for September 15. While the company has been listed on the Nasdaq since 2016, it filed a draft red herring prospectus with the Indian regulatory body, the Securities and Exchange Board of India (SEBI), on March 25 the previous year, with the aim of raising up to $97.5 million.
Yatra's current IPO plan includes a fresh issue of shares valued at $73.5 million (INR 6.1 billion), which is a reduction from its initial target. However, the company has also secured a pre-IPO placement of approximately $7.5 million (INR 620 million) to one of its promoters, THCL.
This move by Yatra represents a shift in the approach of Indian travel companies, many of which had adopted a "wait-and-watch" stance regarding IPOs. Notably, companies like Ixigo and Oyo are also awaiting their turn in the IPO spotlight.
Allocation of Funds A significant portion of the proceeds from the fresh issue, approximately $18.1 million (INR 1.5 billion), has been earmarked for strategic investments, acquisitions, and promoting inorganic growth. Yatra has also allocated an estimated $48 million (INR 4 billion) toward customer acquisition and retention, technological advancements, and various other initiatives aimed at organic growth. The remaining funds will be used for general corporate purposes.
Dhruv Shringi, Co-Founder and CEO of Yatra, emphasized the company's expansion plans, stating that the IPO funds would primarily fuel growth. Shringi also expressed the company's intention to invest in technology and expand its sales workforce for customer acquisition. Yatra has a history of acquisitions, including the purchase of the corporate travel business of PL Worldways in 2019 and the acquisition of Air Travel Bureau, one of India's largest independent corporate travel services providers, in 2017.
Yatra's Journey to IPO SEBI issued the final observation letter to Yatra in November, granting the company a 12-month window to launch its IPO. Initially planned for March, Yatra faced delays in its India investor outreach due to global market sentiments and macroeconomic factors. Despite these challenges, Yatra has received positive feedback from investors, driven by its strong performance, the resurgence of the travel industry in India, and favorable macro trends suggesting long-term growth potential.
Financial Snapshot Yatra reported revenue and adjusted revenue of $14.4 million (INR 1.2 billion) and $22.9 million (INR 1.9 billion), respectively, for the quarter ending March 31, 2023. This marks a significant turnaround compared to the $642,989 (INR 53.4 million) loss in the corresponding quarter of the prior year. Yatra achieved a profit of $90,488 (INR 7.5 million) in the first quarter of 2023, with adjusted EBITDA reaching $2.2 million (INR 185.6 million), reflecting a substantial 251% increase.
As Yatra prepares for its IPO, it aims to leverage its financial stability and growth prospects to attract investors and continue its expansion in India's dynamic travel sector.
