Yatra Online IPO Analysis

Yatra Online IPO Analysis

**IPO size /Promoter holding/ Market cap**

Total offer \~ 775cr
Fresh issue    602cr
OFS                173 cr 
OFS sellers are promoter THCL and PE Pandara Trust.
QIB-     75%
NII         15%
Retail   10%
Funds raised from anchor investors is 348cr.
Post listing promoter group holding 64.4 %

Price band-     135-142
Market cap post listing   \~ 2230cr

**Purpose of IPO**

Customer acquisition (marketing) 340cr
Technology 52cr
Acquisitions/ inorganic growth 150cr



started in 2006, based out of Gurgaon
3rd largest OTA( Online Travel Agent)
largest in terms of number of corporate clients.


**Product segments**

1. Airline ticketing
2. Hotels and holiday package
3. Other services- consists of rail tickets, bus tickets, taxi rentals

Yatra Online has 813 corporate accounts and 49800 SME customers.
Yatra has a market share of 5.2% in terms of OTA industry revenues.




**Industry overview**

The Indian travel industry Rs 2,83,000cr in FY23
Online penetration is 66-68%

OTA (Online Travel Agency) industry in terms of net revenues is 11000cr, expected to grow at 14-15%
B2B OTA is at 4500cr(expected CAGR 14-15%)

**Breakup of the travel industry**

Airline ticketing 52%
Hotel booking 30%
Rail ticketing 18%
**Market leader is MakeMyTrip with 24% market share,** and other players are Easemytrip, Cleartrip, Ixigo. In B2B travel segment, competitor is Thomas Cook.


**Operating metrics**

Gross booking revenues is Rs 6740cr (Makemytrip Rs 53790cr). Gross booking revenues is total ticketing or hotel booking values.
Total air passengers served in FY23 is 56 lakhs.
Total standalone hotel room nights count at 17.53 lakhs (Makemytrip 253 lakhs)

**Segment wise revenues (**Total revenues 380cr)

Airline ticketing 47%
Hotel & package 38%
Other(rail/ bus) 5%

**90% traffic to Yatra Online is organic.**
**Market share of Yatra Online is 5.3%** where leader Makemytrip has 24% market share.





Annual revenues of Yatra Online is 380cr.  PAT  7.6cr.

Take rates ( Operating revenues/ Gross booking revenues) of Yatra Online is 5.7% ( Malemytrip 9.1%, Easemytrip 6%)
EBITDA margins 17.6%( Makemytrip 10.2%)
PAT margins 2% ( Makemytrip is loss making Rs 90cr loss)

Borrowing at 153cr
Current debt/ equity ratio at 0.9

**Trade receivables 287 cr. ( quite high for 380cr revenues)**
Cashflow from operations negative -153cr.


**Points to consider**

**Market leader Makemytrip is still loss making (FY23) despite record flight volumes, despite having 24% market share and 12 times revenues of Yatra Online,** indicating there is significant cash burn involved in terms of **customer inducement/ customer acquisition cost which is 39% of revenues for Makemytrip.**

Hotel & package booking is higher margin business, but leading hotels are trying hard to get direct bookings from customers through their own online channel/ customer relations, which may affect premium segment. Plus there are competition from hotel aggregators like Oyo, homestay aggregator like Airbnb in the mass segment.



**Yatra online is valued at P/E of 286, and P/S of 5.9x, whereas listed peer Easemytrip is at P/E of 48, P/S of 15x.**

View on r/IndianStreetBets by TheMoatInvestor

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