Yatra Online Limited started in 2011, they operate in a segment where they interact and interface with the Customers (i.e., businesses) and end Users (i.e., employees) and are among a small number of uniquely positioned players with a diversified offering of fintech products and services, having one of the largest number of issued prepaid cards in India in partnership with certain of the banking partners (which constituted approximately 16.0% of Bharat's total prepaid transaction volume, as of March 31, 2023), a diversified portfolio of SaaS, including tax and payroll software, and a wide touchpoint reach (Source: Frost & Sullivan Report). We are a leading player in spend management, with more than 50 million prepaid cards issued in partnership with banking partners and more than 2.27 million users served, as of March 31, 2023. Company is sector-agnostic, and the network of corporate customers covers the banking and finance, technology, healthcare, manufacturing, FMCG, infrastructure and automobile industries, among others, where they have relationships with brands such as TATA Steel, Persistent Systems, Vitech, Inox, Pitney Bowes, Wockhardt, MAZDA, PCBL (RP – Sanjiv Goenka Group), Hiranandani group, Cotiviti and Greenply Industries. Company is placed at the intersection of the SaaS and fintech ecosystems, and the SaaS platform is designed for: (i) business spend management (including expense management and vendor management); (ii) rewards and incentives management for employees and channel partners; and (iii) gift card management for merchants, which they refer to as customer engagement management system ('CEMS'). Company offers an ecosystem-based approach across SaaS and fintech, with low customer acquisition and retention costs in the business-to-business ('B2B') segment. The approach revolves around cross-selling, up-selling, and offering the products and services in partnership with other players in the operating ecosystems. Through the arrangements with partner banks and fintechs, the Customers are able to offer their employees, channel partners and consumers a suite of SaaS and fintech solutions. They offer an integrated value proposition through the SaaS platform, providing a combination of payment instruments as well as an integrated mobile application that digitises business and employee spends. Application programming interface ('API') integrations on the platforms provided to the Customers offer them enhanced convenience and an efficient user experience through a simplified dashboard. Accordingly, they have partnered with, and have entered into arrangements with, DBS Bank, Fibe (formerly, EarlySalary) and Tata Securities to offer their products and value-added services ('VAS'), including insurance, investment and tax planning, to the Users on the platform. As per financial performance, Yatra Online Limited has posted total income / net profits of Rs 143.61 Cr / Rs (118.86)/- Cr (FY21) and Rs 218.81 Cr / Rs (30.78)/- (FY22) and Rs 397.46 Cr / Rs 7.63 Cr (FY23). So as per previous financials data, company has shown good growth, but making losses except FY23. Company has an average EPS of Rs (2.42) and average RoNW of (23.96)% for last three fiscals. Issue is priced at a P/BV of 9.44 as per NAV of Rs 15.04 as on 31.03.23. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around (72.38) and as per FY23 earnings P/E is around 291.96, which looks very aggressively priced. As per RHP, peers comparison is shown in above table. On BRLM's front, three lead managers are associated with this IPO, and have handled around 62 IPOs in last three fiscals. SBI Capital Markets Limited : This is 15th IPO from this BRLM. From last 10 IPOs, 4 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, 7 are trading below issue price and remaining above or at par of issue price. (As on 13.09.2023) DAM Capital Advisors Ltd : This is 14th IPO from this BRLM. From last 10 IPOs, 4 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, 2 are trading below issue price and remaining above or at par of issue price. (As on 13.09.2023) IIFL Securities Ltd : This is 36th IPO from this BRLM. From last 10 IPOs, all are opened above issue price or at par on the day of listing. As of now, from last 10 IPOs, one is trading below issue price and remaining above or at par of issue price. (As on 13.09.2023) As per financials, Yatra Online Limited has shown good growth, RoNW is 4.60% and P/E is respectively (72.38) and 291.96 as per FY22 and FY23 earnings. So, issue looks very aggressively priced. Company is a online ticket booking and hotel booking company, which is emerging segment and can expect good growth in this segment. Performance of BRLM is average. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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