RateGain Travel Technologies IPO Details

This is the era of tech, internet and AI. The valuation will sustain.Covid-19 has accelerated the digitization process of customer interactions with hospitality and travel companies. These changes will lead to a shift in business practices by T&H companies from an in-house solution model to third party software and services model. RateGain serves a large, rapidly-growing market. 3rd party T & H technology can clock CAGR of 18% over the next 5 years. This and indicates healthy growth in long run. High growth potential, unique business propositions with little to no competition and valuation comfort – Reliance Securities recommends SUBSCRIBE with a long-term perspective.
I too think it’s a good bet.

Rate Gain has 3 SBUs. This one seems promising according to a Religare report I recently read. So I leaving it here for everyone to read:
RatgeGain provides competitive intelligence and parity intelligence to help hotels and travel suppliers stay competitive and optimize their revenues. Their competitive intelligence products tracked over 3.61 billion price points across over 2,900 hotels, OTAs, airlines, cruise lines and car rentals in the 6 months ended September 30, 2021 and covers points such as pricing, ratings, rankings, availability, room descriptions, cancellation policy, payment policy, discounting and package inclusions. They operate a subscription model where the customers in the hospitality and travel sector subscribe to their DaaS products such as Optima and Parity+. Active Customers in their DaaS business have grown from 945, as of March 31, 2019 to 1,083 Active Customer, as of March 31, 2020 and to 1,160 Active Customers, as of March 31, 2021 while as of September 30, 2021, they had 1,406 Active Customers.

Still there are people talking negative about the loss and I want to clear one thing – this is because Rategain was acquiring new software when whole world was locked down and industry was down. This was a good time to buy and invest and now they are reaping the rewards with improved margin and better foothold. World has not yet opened completely but it has already recovered 30% of its revenue. It’s EBITDA is positive, it is cash positive, customer has increased yoy and excellent revenue retention rate.

RateGain has managed to get Rs. 598 CR from anchor investors ahead of its IPO as per a Moneycontrol article. This is very positive and has built the confidence of many in this company. It’s acquisition-led strategy in the COVID-19 lockdown years, it’s lack of competitors, it’s reasons to go for the IPO and its growth trajectory – All see promising and it is a sure multibagger.

The loss that people are seeing is because of the impact of impairment. The numbers changed to unfavorable Rs. 28.57 crore for FY21 and unfavorable Rs. 8.33 crore for 5 months ended August 21. The firm reported revenues of Rs. 264 crore for FY2021 and a PAT before the goodwill impairment of Rs. 7.5 crore. The revenues for 5 months ended August 2021 were Rs. 131.22 crore and a PAT of Rs 4.57 crore before impairment. The losses seen in the recent financials of RateGain are on account of the acquisition done by the company in the course of the last two years and the impairment of goodwill on the same.
Losses for a SaaS company in a growth stage are not unusual as profits are more backend loaded.