Yatra Online's initial public offering (IPO) on the National Stock Exchange (NSE) and BSE opened below expectations on Thursday. The company's shares were listed at Rs 127.5 ($1 = Rs 83.16) on NSE and Rs 130 on BSE, falling short of their issue price of Rs 142. By mid-morning, the shares were quoting at Rs 134.60 on BSE.
The lackluster performance was attributed by Shivani Nyati from Swastika Investmart to Yatra's high P/E valuation, its reliance on the airline ticketing business, and stiff competition in the travel industry.
Despite this initial setback, Yatra managed to raise Rs 775 crore (Rs 1 crore = $120,252) from the IPO, which was subscribed 1.66 times. The funds will be directed towards strategic investments, acquisitions, customer acquisition and retention, technology enhancement, and other organic growth initiatives.
Analysts at Religare Broking have expressed optimism about Yatra's future plans. They predict that the online travel agency will continue to invest in technology and new product offerings, positioning itself as a 'one-stop-shop' for travel services.
However, Axis Capital (NYSE:AXS) has issued a note of caution. They argue that Yatra's success will largely hinge on its ability to compete against both established and emerging competitors like Cleartrip Pvt Ltd, Easy Trip Planners Ltd, Thomas Cook India Ltd, among others.
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