Abhishek Law | New Delhi, May 8 |
Business recovery has been very strong, says CEO and Co-Founder, Dhruv Shringi
Leading online travel firm Yatra is hopeful of going ahead with its India IPO by the end of this fiscal.
Listed on the Nasdaq in December 2016, the company announced on March 25 that its Indian subsidiary, Yatra Online Limited, has filed a draft red herring prospectus (DRHP) with the market regulator SEBI for an initial public offering (IPO) aggregating up to ₹750 crore or approximately $100 million of primary proceeds and a secondary offering of up to 88,96,998 equity shares by THCL Travel Holding Cyprus Limited, a subsidiary of Yatra Online Inc, which amounts to approximately 8 per cent of the shares outstanding of Yatra Online.
“We are in the early stage of the IPO processes and are awaiting SEBI clearances. Through primary and secondary offerings, we will look to raise around ₹1,000 crore odd. So our endeavour would be to have the IPO by the end of this fiscal,” Dhruv Shringi, Co-founder and CEO, Yatra, told BusinessLine.
Shringi is also the Co-Chairman of FICCI’s travel, tourism and hospitality committee. According to him, the funds would be used primarily for expansion in India, apart from allowing the company to raise capital at a potentially higher valuation thereby reducing dilution and balance sheet risk.
India’s largest online portal, MakeMyTrip is listed on Nasdaq while the country’s other major player, EaseMyTrip is listed on Indian bourses — NSE and BSE. Ixigo, another portal, is planning an IPO too.
Shringi said, business “recovery has been very strong” on both B2B and B2C sides.
Corporate demand — led primarily by large organisations, IT companies, BFSI and the consulting firms — is back with numbers in India trending close to 70-80 per cent of pre-Covid levels. Travel is “across the board” between the top, mid and junior management levels. This has led to an improvement in hotel room rates across metros, cities and tier-I towns.
Hotel ARRs (average room rates) is up significantly with rates in leisure destinations “trending north of the pre-pandemic levels”. “As you know, hotel ARRs are a function of the select micro-market. In the leisure destination, they are trending north of pre-pandemic; while business destinations are getting close to pre-pandemic levels,” he said.
‘No immediate pressure’
According to Shingi, there seems to be no immediate pressure on domestic leisure travel segments despite international destinations opening up and flights being resumed to and from the country.
“I think, right now there is so much pent-up demand that all boats will rise it. Maybe at some point, a year or so down the line, we may see some impact. But right now there is enough demand to take care of the international and domestic needs,” he said.
He added, “There is demand in the market and growth. So people are travel to tap that. Hence, it has led to a strong recovery in the sector (corporate travel) and so not just CXOs are travelling. It’s a more broad-based trend.”