THCL Travel Holding Cyprus Limited, a subsidiary of Yatra Online, Inc., filed a DRHP with the market regulator SEBI for an initial public offering aggregating up to Rs 7,500 million in primary proceeds and a secondary offering of up to 8,896,998 equity shares.
“We have evolved our company to become one of India’s biggest online travel agents over the past 15 years,” stated CEO of Yatra Online. “The growth of tourist infrastructure, growing discretionary expenditure, and more frequent business and leisure travel are likely to propel the Indian travel sector forward. We will be able to connect into a complementary shareholder base with this planned stock offering, providing a wonderful potential to profit from expanding tourist expenditure in India and to accelerate the major growth initiatives we have ongoing, producing long-term value for our investors.”
Yatra Online Inc. hopes that its subsidiary Yatra Online Limited’s IPO in India would provide it access to local Indian institutional and retail investors who are currently unable to invest in Yatra Online Inc. due to NASDAQ listing limitations. It also wants to broaden the possible shareholder base of the amalgamated business by adding Indian capital markets and expanding its visibility to a larger pool of equities analysts. Dilution and balance sheet risk are also mitigated by obtaining funds at a possibly greater value.
The degree of dilution of Yatra Online, Inc. as a result of the main issuance of shares and the value of proceeds from a secondary sale of shares by THCL will be determined via a price discovery process. The IPO of Yatra Online Limited is contingent on favorable market circumstances, as well as corporate, regulatory, and other clearances.
As a result of increased rates and the conflict, the IPO market has plummeted by 70%
Initial public offerings (IPOs) have dropped in the first quarter after setting a new high in 2021, as investors become jittery as a result of the Ukraine conflict and rising prices, sabotaging agreements.
According to Bloomberg statistics, just $65 billion has been raised via IPOs throughout the globe in 2022, down 70% from $219 billion in the first three months of last year. The worldwide market is on course to have its lowest quarterly profits since the coronavirus pandemic began in 2020. Nonetheless, firms like Plenitude, a renewable energy company, and Galderma, a skin-care company, are gearing up to test investors’ appetite for fresh shares in the coming months.
In 2021, the number of stock market listings achieved a new peak as extraordinary stimulus measures propelled an all-time high in global stocks. Now, with central banks boosting interest rates in reaction to rising inflation and investors alarmed by Russia’s invasion of Ukraine, the situation could not be more unlike.
Investors are avoiding firms with high predicted growth rates but little in the way of actual earnings, which are the kind of stocks that dominate the IPO market, due to rising interest rates mixed with violent market fluctuations.
Slump in the Initial Public Offering
The Cboe Volatility Index, a widely followed indicator of projected market swings, soared over 30 when Russia invaded Ukraine and has averaged around 26 this year, indicating that IPOs may be too risky an investment to attract enough interest. The bulk of worldwide listings have historically been priced while the index is below 25.
IPOs have been canceled all across the world, from New York to New Delhi, due to wild market fluctuations. The Life Insurance Corporation of India, which had expected to collect up to $8.5 billion for the Indian government via an IPO by the end of March, is now targeting a mid-May deadline. The IPO would be one of the biggest in the world this year.
Even lightning discounts like blank-check offers, which are normally priced in a couple of days, are becoming obsolete. Investor excitement is waning owing to poor returns and increased regulatory scrutiny, thus the vehicles, also known as special-purpose acquisition firms, are delisting at an all-time high this year.
Further Key Takeaways
But it’s not all doom and gloom. While follow-on share sales begin to pick up from Asia to Europe and the United States, IPOs in the Middle East have been defying the global trend and outperforming foreign markets, thanks to high oil prices and rising interest rates. With the situation in Ukraine heightening supply fears, several key commodities are trading at or near record prices. This has already sparked increased activity in the stock markets.
WE Soda, one of the world’s largest producers of natural soda ash, is evaluating options including a London IPO, according to Bloomberg News. Qatar’s sovereign wealth fund cashed in on a $1 billion stake in Glencore Plc via an overnight transaction March 23, while WE Soda, one of the world’s largest producers of natural soda ash, is evaluating options including a London IPO, according to Bloomberg News.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.