Yatra Online Limited IPO

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15th – 20th Sep 2023
29 Sep 2023
₹135 – ₹142
105 shares (₹14910)

About


Incorporated in 2005, Yatra Online Limited provides information, pricing, and booking facilities for domestic and international customers.

As per the CRISIL Report, It is India’s largest corporate travel services provider in terms of number of corporate clients and the third-largest online travel company in India among key Online Travel Agency (OTA) players in terms of gross booking revenue and operating revenue, for FY 2023 and has the largest number of hotel and accommodation tie-ups amongst key domestic OTA players of over 2,105,600 tie-ups, as on March 31, 2023.

Given the size and growth dynamics of the India travel market, they have strategically focussed both on the corporate and consumer markets and are the leading corporate travel service provider in India with 813 large corporate customers and over 49,800 registered SME customers and the third largest consumer online travel company (OTC) in the country in terms of gross booking revenue for Fiscal 2023.

They also provide access through their platform to hotels, homestays, and other accommodations, with about 105,600 hotels in 1,490 cities and towns in India, as of Fiscal 2023 and more than two million hotels globally, which is the highest hotel inventory amongst key Indian OTA players.

About the industry:

Travel market in India

As per CRISIL’s report, The Indian travel industry was estimated at Rs 2,825-2,845 billion in fiscal 2023. Led by a growing economy, geographical and cultural diversity, and various government initiatives, the Indian travel industry grew at 6-8% CAGR between fiscal 2017 to 2023, to a size of Rs 2,825-2,845 billion. The growth momentum is expected to continue. We expect the industry to grow annually by 9-11% to Rs 4,540-4,560 billion by fiscal 2028, driven by the development of tourism infrastructure, rising income levels translating to higher discretionary spending on travel and tourism, increase in the frequency of travel business and leisure purposes, reforms in visa and increase in connectivity across means of transport.

Gross booking revenue of the OTA industry in India is estimated to grow at a 13-14% CAGR between fiscals 2023 and 2028 to Rs 2,440 billion – 2,460 billion. In net revenue terms, it is likely to grow 14-15% to Rs 213 billion – 215 billion by fiscal 2028, driven by changing customer preferences and technological advancements. Within the OTA market, the business-to-business (B2B) category is expected to grow faster than the business-to-customer (B2C) category through fiscal 2028. The B2B category is estimated to grow at a 15-16% CAGR to Rs 89 billion – 93 billion in fiscal 2028 from Rs 42 billion – 46 billion in fiscal 2023.

Online penetration in the Indian travel market

Ticketing services across travel segments have undergone a dramatic change thanks to increased internet penetration, greater affordability of smartphones, user-friendliness of online platforms, convenience in terms of comparison, varied modes of payment offered (credit cards, debit cards, and net banking), and faster pace of service providers adopting digital platforms for their respective businesses. Online penetration, defined as the share of bookings done online via captive websites of the service providers or through OTAs, of the Indian travel industry stands at 66-68% as of fiscal 2023. It is expected to increase to 73-75% by fiscal 2028, supported by growth in online transactions.

Online ticketing market in India

In fiscal 2023, the Indian online ticketing market is estimated to be worth Rs 1,900-1,920 billion, registering 12.5-13.5% CAGR from Rs 900-920 billion in fiscal 2017. Growth can be attributed to the increasing penetration of the internet and smartphones. Other enabling factors include a growing share of low-cost airlines, the increasing popularity of online railway ticket booking systems, and the convenience that online bookings offer. However, the online ticketing industry is not without its share of challenges.

Travelers’ concerns about the security of their personal information and online financial frauds are the key challenges that require to be addressed effectively in order to ensure a seamless transition from offline to online channels. The industry from its size in fiscal 2023 (Rs 1,900 billion – 1,920 billion) is expected to grow to 1.75 times (Rs 3,335 billion – 3,355 billion) by fiscal 2028, at a CAGR of 11.5-12.5%.

Role of OTAs in total online ticketing in India

As per industry estimates, in value terms, Online Travel Agencies (OTAs) accounted for 67-69% of the total online ticketing industry in India as of fiscal 2023, based on gross booking revenue. In absolute terms, it translates to an estimated market size of Rs 1,250-1,270 billion. Their share has grown from 55-57%. during fiscal 2017, largely due to the comparatively friendly user-friendly interface compared with the captive website of service providers and ease of comparison across options. Higher discounts from the OTAs as well as offers by banking partners have also made them competitive in pricing vis-à-vis captive websites. This trend is expected to continue in the medium term, with the share of OTAs in the online ticketing industry expected to reach 72-74% by fiscal 2028.

Peer Comparison

Company Number of agents Year of commencement No.of Customers in million  (FY23) Employee Count
Yatra Online 29800 2006 14 1100
MakeMyTrip Ltd 36000 2000 56 (FY22) 4090
Easy Trip Planners Ltd 50000 2008 14 1000

Objects of the issue and proceeds utilization:

The Rs. 775 crores public offer of Yatra Online Limited IPO comprises fresh equity issue worth 602 crores and OFS worth 173 crores.

Purpose Proceeds (₹ crores)
Strategic investments, acquisitions, and inorganic growth 150
Investment in customer acquisition and retention, technology, and other organic growth initiatives 392
General corporate purposes Balance

Financial information and other valuation metrics

Financial Year Total Assets (₹ crores) Total Revenue (₹ crores) Profit After Tax (₹ crores) EPS Adjusted EBITDA (₹ crores)
March 31, 2021 562.9 143.61 (118.86) (11.0) (5.06)
March 31, 2022 547.78 218.81 (30.78) (2.76) 32.15
March 31, 2023 681.25 397.46 7.63 0.69 66.96

Adjusted EBITDA = Restated profit/ (loss) for the year + Tax expense/(benefits) + Finance Costs + Depreciation and Amortisation + Interest Income (bank deposits and others) + Unwinding of discount on other financial assets + Foreign exchange gain (net) +
Exceptional items + Share-based payment expenses + Share of (profit)/loss from joint venture + Listing and related expenses.

Risk factors to consider:

Dependance on B2B Business and risk of change in travelers’ preference: The company derives a significant portion of its Adjusted Margin from B2B business, contributing 28.25% of the total Adjusted Margin in Fiscal 2023. Changes in travelers’ preferences due to increased use of telepresence equipment, cost of travel, spending habits, and other factors may adversely affect the demand for travel services and hotel rooms leading to adverse effects on the business, results of operations, financial condition, and cash flows.

Dependance on airline ticketing business: The company is dependent on its airline ticketing business, which generates nearly 47% of its revenues and is derived from a small number of airline suppliers in India.

Changes in Internet search engine algorithms and dynamics: The company relies on Internet search engines, such as Google and Bing, to generate traffic to its websites, principally through the purchase of travel-related keywords. Search engines, including Google, frequently update and change the logic that determines the placement and display of results of a user’s search, such that the purchased or algorithmic placement of links to its websites can be negatively affected.

IPO Schedule

Issue Period 15th September to 20th September 2023
Deadline for accepting UPI mandate Until 5 PM on the issue closing day
Finalization of Allotment 25th September 2023
Initiation of Refunds 26th September 2023
Credit of Shares 27th September 2023
Date of Listing 29th September 2023
Mandate end date 5th October 2023
Anchor Investors Lock-In End Date 20th October 2023

How to apply to the Yatra Online Limited IPO?

You can apply for the Yatra Online Limited IPO using any supported UPI app by following two steps:

  • Enter your bid on Kite
  • Accept the UPI mandate on your phone

On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.

How to check the allotment status for Yatra Online Limited IPO?

You can check the allotment status for the Yatra Online Limited IPO on the website of the Registrar and Transfer agent. Alternatively, you can also check the allotment status on the NSE website.