The shares of RateGain Travel Technologies Ltd on Friday listed with a discount of over 15 per cent against the issue price of Rs 425.
The stock listed at Rs 364.80, a decline of 14.16 per cent from the issue price on the BSE. It further tumbled 19.45 per cent to Rs 342.30.
At the NSE, it made its debut at Rs 360, a discount of 15.29 per cent. The market valuation of the company was at Rs 3,882.79 crore in early trade.
RateGain Travel Technologies' initial share sale was subscribed 17.41 times earlier this month.
The IPO had a fresh issue of up to Rs 375 crore and an offer-for-sale of up to 2,26,05,530 equity shares, and the price band was Rs 405-425 per share.
Check what analysts are saying, according to a report published in Financial Express.
Aditya Birla Capital
The analysts at the investment firm have given a subscribe call to the issue. RateGain will trade at 18.1x FY21 P/S, indicating a valuation broadly in line with global SaaS companies with similar growth prospects. The company generates stable and recurring revenues with relatively low capital requirements, leading to healthy free cash flow generation.
KR Choksey Research.
It has assigned a ‘subscribe’ rating to the IPO. The issue is priced at a price/sales multiple of 17.3x and 18.1x of its FY21 sales, respectively, which we believe is reasonable keeping in mind the unique nature of its business and almost nil competition in the Indian market, a report in Moneycontrol said.
Also, with the easing of restrictions and the travel industry getting back to normalcy, the company will further improve its business going forward
The brokerage firm said that the valuations were at a premium to peers. The price band of Rs. 405-425 implies P/S of 18x on FY21 sales (of Rs2.5bn). Global vertical SaaS peers are trading at average P/S of ~14x FY21 sales. However, analysts justified the premium valuations superior product portfolio and highly predictable, scalable and profitable business model.