Yatra Online IPO subscribed 1.61 times, but aggressive pricing may have dampened demand

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Yatra Online’s initial public offering (IPO) was subscribed 1.61 times on the final day of bidding, with bids for 4.98 crore equity shares against an offer size of 3.09 crore shares. Retail investors provided decent support to the issue, buying 2.11 times the allotted quota, which is 10% of the offer size. However, the portion set aside for qualified institutional buyers (QIBs) and high net-worth individuals (HNIs), which is 75% and 15% of the IPO size, was subscribed 2.05 times and 42%, respectively.

Analysts believe that the aggressive pricing of the issue may be one of the reasons for the tepid response from QIBs. At the upper price band, on a post-issue basis, Yatra Online is valued at 288.2x FY23 price-to-earnings (P/E) and 5.9x FY23 price-to-sales (P/S).

Despite the tepid response from QIBs, some brokerages remain positive on the company from a medium-to-long-term perspective. They believe that Yatra will expand its business through innovative travel offerings and leverage its deep relationships with customers and technology innovations to further strengthen the Yatra brand.

Key takeaways:

  • Yatra Online’s IPO subscribed 1.61 times on the final day of bidding.
  • Retail investors provided decent support to the issue, but QIBs and HNIs were less enthusiastic.
  • Analysts believe the aggressive pricing of the issue may be one of the reasons for the tepid response from QIBs and HNIs.
  • Some brokerages remain positive on the company from a medium-to-long-term perspective.

IPO schedule:

  • Basis of allotment of IPO shares to be finalized by September 25.
  • Shares to be credited to the demat accounts of eligible investors by September 27.
  • Refunds to be transferred to unsuccessful investors or ASBA account to be unblocked by September 26.
  • Trading in equity shares to commence on the BSE and NSE from September 29.

Overall, the IPO subscription is not very impressive, but it is still above the minimum requirement of 90% subscription in the QIB category. The company’s strong revenue growth and profitability in FY23 are positive factors, but investors may be cautious due to the aggressive pricing of the issue.

Investors should carefully consider the company’s fundamentals, valuation, and risk factors before making an investment decision.


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