IPO listing review - RateGain Technologies
Issue Details -
largest Software as a Service (SaaS) company in the hospitality and travel industry in India has mobilised Rs 1,335 crore through its public issue. The public issue received 17.41 times subscription during. Non-institutional investors - 42.04 times, qualified institutional 8.42 times and retail investors had put in bids for 8.08 times. Company has issued shares at Rs.425 per share.
RateGain raised Rs 599 crore from anchor investors a 13.2% allocation to anchor investors. Shares of the company had listed 20% lower from the issue price and still trade 8% below the IPO price. The anchor lock-in period ends on January 14.
RateGain has recently published results which were above market expectations.
Results -
Recently company announced results and the following are the hightlights.
Revenue improved in 9MFY22 driven by a strong travel demand in our key market of United States even though most of Europe and Asia continued to be under restrictions following localized lockdowns.
The company’s revenues grew by around 40% yoy during 9MFY22 and grew by around 55% on yoy basis in Q3FY22.
Q3FY22 is the highest quarter in terms of new contract wins for RateGain, during which the company witnessed a growth of 215% over Q3FY21. 9MFY22 saw a growth of around 131% over the corresponding previous year.
Gross Retention Rate remained around 92% during this period.
Net Retention Rate remained around 121% during this period
Customer Counts increased from 1,462 on Aug 31, 2021, to around 2,264 by Dec 31, 2021.
US remained largest geography with around 65% revenue contribution.
LTV to CAC improved to 11.34 from 8.9 last year, on the back of high volume of new bookings.
Recurring Revenue remained at around 97%
Stock Performance since listing -
Recommendation -
If anchor investors exit we can expect a good amount of correction. Declines to 340–350 levels should be viewed as a good opportunity for investors to buy and hold.