Rategain Travel Technologies Limited

Rategain Travel Technologies Limited is among the leading distribution technology companies globally and is the largest Software as a Service ('SaaS') company in the hospitality and travel industry in India. They offer travel and hospitality solutions across a wide spectrum of verticals including hotels, airlines, online travel agents ('OTAs'), meta-search companies, vacation rentals, package providers, car rentals, rail, travel management companies, cruises and ferries. They are one of the largest aggregators of data points in the world for the hospitality and travel industry. Company offers a suite of inter-connected products that manage the revenue creation value chain for the customers by leveraging the big-data capabilities and integration with other technology platforms helping hospitality and travel providers acquire more guests, retain them via personalized guest experiences and seek to maximize their margins. Company delivers the hospitality and travel technology solutions through the SaaS platform and the products are classified into three strategic business units:1. Data as a Service ('DaaS')    a) Market Intelligence    b) Dynamic Pricing Recommendations2. Distribution3. Marketing Technology ('MarTech') The customers of company include 25 out of the top 30 OTAs, several of the world's fastest-growing airlines, 23 of the top 30 hotel chains, tour operators and wholesalers, all leading car rental companies, all large cruise lines, and the largest travel management companies. As per financial performance, Rategain has posted total income/net profits of Rs 272.70 Cr / Rs 11.03 Cr (FY19), Rs 457.61 Cr / Rs (20.10) Cr (FY20), Rs 264.09 Cr / Rs (28.75) Cr (FY21) and Rs 131.22 Cr / Rs (8.34) Cr (5M FY22). So company has posted zigzag results and posed losses. On operational bases company is profitable and trade receivables are around 25% of FY21 earnings. They have posted an average EPS of Rs (2.10) and average RoNW of (9.42)% for last 3 fiscals. Issue is priced at P/BV of 16.78 as per NAV of 25.33 on 31.08.21. As Company is Making losses, so there is no measure to check, if it is fairly priced or not. As per RHP, there are no listed peers. On BRLM's front, 3 lead managers are associated with this IPO, and have handled around 59 IPO in last three fiscals. From last 10 IPOs, two are opened below issue price and remaining are opened above issue on the day of listing. As of now, five are trading below issue price and other are trading above issue price. ( As on 01.12.21) As per financials, Rategain Travel Technologies Limited has shown zigzag results, RoNW is (11.67)% and P/E is negative. Company is in Software Industry and provides Software as a Service ('SaaS') in the hospitality and travel industry. This sector is expected to grow at good rate, but current pandemic has adverse effect on this sector. Performance of BRLM is average. So, we are giving AVOID rating to this IPO.

• 1 Bhanu Chopra
• 2 Megha Chopra