Yatra may go for US listing next year

Online travel company Yatra.com is likely to get listed on an American stock exchange, says chief financial officer Dhruv Shringi. It is expected to look at launching its initial public offer (IPO) in the next financial year. “The e-commerce market is nascent in India. However, in the US, such companies from various parts of the world are listed. There is much more market research around them, which is not possible in India,” explained Shringi on the US preference.

The company, which recently made news for buying Travelguru.com, is keen on more acquisitions. The Travelguru deal, while increasing the product portfolio in the hotels segment, is helping it increase its valuation, say analysts. An IPO is likely to help the company grow its business inorganically in the hotel and holidays space, which are the focus areas for industry leader MakeMyTrip’s growth in the past two years.

Yatra would be following MakeMyTrip, which had a successful listing on the Nasdaq exchange in the US in August 2010. MakeMyTrip had been on an acquisition spree after its IPO, having raised $70 million by selling five million shares at $14 each, becoming the fourth Indian company to complete its IPO in the US since 1999. MakeMyTrip acquired a 79 per cent stake in Luxury Tours & Travel Singapore; 29 per cent in Delhi-based My Guest House Accommodations, a portal focusing on budget accommodation in India; and 19.9 per cent in Ixigo, a leading travel meta-search engine in India.

The recent IPO by Facebook was seen as a disaster, making many online companies, including Yatra, cautious of listing in the current economic climate. Yatra officials told Business Standard the company was ready to launch its IPO, but was waiting to see a correction in the market sentiment in the US. It is yet to decide between Nasdaq and the New York Stock Exchange. A senior executive in an e-commerce company said Indian bourses give much more importance to the profitability of a company over its revenue, unlike the US bourses.

Also, the introduction of the Jumpstart our Business Startup (JOBS) Act in the US, which has eased compliance norms and has provisions for reducing the cost of regulatory filing, is an encouraging factor for Indian companies to list on an American exchange.

In line with its plan to build its holiday business, Yatra is planning extensive expansion of its offline presence by signing up 100 franchisee stores in tier-2 and tie-3 cities. About 95 per cent of its holiday packages are sold via retail outlets and call centres. The company is also going to launch its next campaign with film star Salman Khan as brand ambassador within the next few months to promote its holidays.