Yatra Online lists at 10% discount: Should you buy, sell or hold the stock?

Yatra Online IPO opened for subscription on September 15 and closed on September 20.

Yatra Online made a weak debut with its shares listing at a 10 percent discount at Rs 127.50 on the NSE and Rs 130 on the BSE, against the IPO price of Rs 142, on September 28. The stock, however, pared some losses and traded up at Rs 136 on the NSE by noon.

Shivani Nyati of Swastika Investmart called the investment in the stock risky and advised investors to exit their positions.

The Rs 775-crore public issue was subscribed 1.61 times, with bids for 4.98 crore equity shares against an offer size of 3.09 crore shares. The IPO opened for subscription on September 15 and closed on September 20.

“Yatra Online Limited shares witnessed a negative listing. This is likely due to the company's high P/E valuation, its reliance on the airline ticketing business, and the competitive nature of the travel industry,” Nyati pointed out.

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The company had posted losses for the years ended March 2021 and March 2022. In FY23, the company turned profitable and reported a net profit of Rs 7.6 crore, owing to a deferred tax expense that allows losses to be offset against a profit of future periods.

“Overall, YOL is a risky investment, and investors who receive an allotment of this IPO should consider exiting their position,” she said.

Yatra Online claims to be India's third-largest online travel company among key OTA (Online Travel Agency) players in gross booking revenue and operating revenue for FY23. The company has the most significant hotel and accommodation tie-ups among key domestic OTA players.

In its prospectus, the company also said it is India's leading corporate travel service provider with 813 large corporate customers and over 49,800 registered SME customers.

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