The public offer of software-as-a-service company RateGain Travel Technologies has subscribed 17.41 times, as it received bids for 30.20 crore equity shares against the IPO size of 1.73 crore equity shares.
Qualified institutional investors, for whom 75 percent of the offer is reserved has been subscribed 8.42 times against the portion set aside for them.
The reserved portion of non-institutional investors was booked 42.04 times, and that of employees saw 1.37 times subscription.
The IPO received a strong response from retail investors, whose portion was subscribed 8.08 times.
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RateGain is going to mop up nearly Rs 1,336 crore through its initial public offering that consists of a fresh issue of shares worth Rs 375 crore and an offer for sale of Rs 961 crore. The price band for the offer, which opened on December 7, is Rs 405-425 per equity share.
"At the issue price, RateGain will trade at 18.1x FY21 P/S, indicating a valuation broadly in line with global SaaS companies with similar growth prospects. RateGain generates stable and recurring revenues with relatively low capital requirements, leading to healthy free cash flow generation," said Aditya Birla Money, which rated the IPO as "subscribe" for long term gains.
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Going ahead, relationships with large enterprises and a wide array of product offerings would contribute to higher mining of existing accounts and robust growth, the brokerage believes.
The company offers travel and hospitality solutions across a wide spectrum of verticals including hotels, airlines, OTAs, car rentals, cruises, and more. RateGain's solutions help companies find the right guest, decide the right price, distribute it through the preferred channel and facilitate better customer experience.
Also read - RateGain Travel Technologies IPO: Should you subscribe?
RateGain will repay the debt availed by Rategain UK and pay deferred consideration for acquisition of DHISCO, through the net proceeds from the fresh issue. In addition, the company will spend offer money for strategic investments; investment in technology innovation, artificial intelligence, and other organic growth initiatives; and purchase capital equipment for its data center.
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