RateGain IPO allotment is out and the stock is scheduled to list on the bourses tomorrow. The IPO was priced in the range of INR405 – 425 per share and employees received a discount of INR40 per share. As the listing nears, investors are curious to know the fate of their investment. RateGain IPO grey market premium is positive, although the worry is that it is on a decline. More on this later.
The INR1,335.73 crore offer was subscribed 17.4 times with the maximum traction coming from NIIs or high networth individuals (HNIs). The category was oversubscribed over 42 times. Meanwhile, the retail category was covered only 8 times.
RateGain Travel Technologies IPO Subscription
| Category | Shares Offered | Day 1 | Day 2 | Day 3 |
| QIB | 93,93,424 | 0.00 | 0.00 | 8.42 |
| NII | 46,96,711 | 0.04 | 0.08 | 42.04 |
| Retail | 31,31,141 | 2.23 | 3.98 | 8.08 |
| Employees | 1,29,870 | 0.34 | 0.72 | 1.37 |
| Total | 1,29,870 | 0.41 | 0.75 | 17.41 |
Subscription figures in number of times, at 5 PM
RateGain IPO grey market premium declining
Grey market activity in the IPO started on 3 December 2021 on a positive note. RateGain IPO grey premium was INR130 per share on the first day. However, it started declining as the days passed and went below the psychological mark of INR100 per share. But it didn’t stop there and went all the way to INR40 per share which is where it has remained for the last five days. The latest GMP of INR35 per share roughly translates to a premium of just 8.2% on allotment price of INR425 per share for retail investors.
The movement represents a decline of 70% in grey premium and such deep cuts are never good for the stock in question after listing.
Similar reductions are seen in subject to sauda rates which represents trading in confirmed allotment applications. Again, this metric is positive but substantially off the highs it started on.
Read Also: 7 common IPO mistakes and how to avoid them
RateGain IPO GMP Daily Trend
| Date | RateGain IPO GMP | Kostak | Subject to Sauda |
| 16 Dec 2021 | INR35 | – | INR450 |
| 15 Dec 2021 | INR40 | INR200 | INR550 |
| 14 Dec 2021 | INR40 | INR200 | INR550 |
| 13 Dec 2021 | INR40 | INR200 | INR550 |
| 11 Dec 2021 | INR40 | INR200 | INR600 |
| 10 Dec 2021 | INR60 | INR200 | INR600 |
| 9 Dec 2021 | INR80 | INR220 | INR700 |
| 8 Dec 2021 | INR100 | INR250 | INR1,500 |
| 7 Dec 2021 | INR100 | INR250 | INR1,500 |
| 6 Dec 2021 | INR120 | INR250 | INR2,000 |
| 4 Dec 2021 | INR130 | INR250 | INR2,000 |
| 3 Dec 2021 | INR130 | INR200 | INR2,000 |
One related example is Star Health IPO which saw a similar reduction in grey market premiums. The stock eventually listed on a discount and while it recovered on the first day, it has been a downhill journey in the subsequent trading sessions.
But analysts forecast bright outlook
Meanwhile, most analysts are positive on the prospects of the company which offers Software as a Service (SaaS) in the hospitality and travel industry in India and abroad. It offers travel and hospitality solutions across a wide spectrum of verticals including hotels, airlines, online travel agents (OTAs), meta-search companies, vacation rentals, package providers, car rentals, rail, travel management companies, cruises and ferries.
A vast majority of equity analysts have Subscribe rating on the IPO highlighting scalability and accelerated digitization in hospitality and travel industry in the wake of Covid-19 as prominent reasons. Among the major brokerage houses, only BP Wealth and Marwadi Financial Services have Avoid rating on the IPO while SMC Global Securities offered it 1.5 stars out of maximum 5.
While the outlook for the industry continues to be positive, it may be a rough ride for the stock considering RateGain IPO grey market premium movements.
