RateGain’s Value Falls 15 Percent on Stock Market Debut in India

RateGain Travel Technologies made its stock market debut in India at about $4.75 (360 rupees) a share, a discount of about 15 percent to its initial public offering listing price of about $5.59 a share (425 rupees).

After listing on the National Stock Exchange, the company’s market capitalization was approximately $51.2 million (3,894 crore rupees), according to BSE data. Shares closed the day down about 20 percent.

The stock debuted on the same Friday when the benchmark CNX IT index, representing 500 Indian information technology companies, rose 1.3 percent. RateGain may have been hurt by worries about the Omicron variant’s impact on the travel sector that it serves with software solutions.

The initial public offering worked out mostly fine for the travel tech vendor’s private equity owner, TA Associates, which had a 22.8 percent stake in the tech vendor via its affiliate Wagner. Institutional investors and retail investors were over-subscribed to the sale of RateGain’s share issue, including the private equity firm’s 17 million shares. The company’s founders sold some of their shares as well.

The market debut was also a success for Harmeet Singh, who the sponsors essentially appointed CEO in October 2019 on the bet he had skill, from having led more than 100 mergers and acquisitions at other technology companies, to help RateGain go public. Singh did. The share issue generated about $50 million, netting the sponsors a payout and gaining the company cash for future acquisitions.

RateGain, founded 15 years ago and based in Noida, India, offers business intelligence, distribution, and social media management services.

Its 1,434 clients include hotels such as Kessler Collection, Lemon Tree, and members of InterContinental Hotels Group — plus airlines, railways, car rental companies, and cruise lines. It is one of the world’s largest managers of travel data.

The pandemic hurt the company, as it did most companies in the travel sector. RateGain’s revenue dropped to roughly $34 million (250.7 crore rupees) in the fiscal year ending March 31, compared to revenue of about $53 million (398.7 crore rupees) in the previous fiscal year. It reported a loss of approximately $300,000 (27.8 crore rupees) in the fiscal year through March, increasing its prior year’s loss.