RateGain: India's first listed Saas company may be down from stock market highs but not out

Bhanu Chopra, Chairman and MD, RateGain Image: Madhu Kapparath

A farmhouse near Delhi airport, May 2021. Tanmaya, we have to do an IPO,” uttered an elated voice from the other side of the phone. “And we have to do it before the year ends,” underlined Bhanu Chopra, exhibiting a sense of abnormal urgency.

The poor CFO, to whom Chopra was speaking, was hospitalised and battling the deadly Delta variant of Covid. He expected a normal check-in call from his boss. The chairman and managing director did call, but he was talking business. “Don’t worry. We will do it. Let me come back, and discuss,” the CFO mumbled, trying his best to calm down Chopra, who too had tested positive with the virus.

“Das,” the founder of RateGain continued with his passionate and obsessive tone, “we need to start working on it as soon as possible.” The CFO ignored, but he knew his boss was up to something.

A month later, Chopra set the ball in motion. He summoned the bankers and started preparing for the listing. “I would be lying if I say that I always wanted to take the company to IPO,” says Chopra, who started RateGain as a price comparison website for consumers from his three-bedroom apartment in Delhi in 2004, kept it bootstrapped over the next decade and scaled it profitably from ₹1 crore in revenue in the first year to ₹64 crore in 2014.

Six fiscals later, RateGain scaled at a furious pace. The company, which had by now morphed into a revenue maximisation SaaS platform for the hospitality and travel industry, closed FY20 with an operating revenue of ₹398.7 crore, and for the first time since inception, it posted a loss. In March 2020, India went under its first national lockdown, and travel and hospitality as a sector got ravaged the most by the pandemic. RateGain, too, felt the pain and posted its second consecutive loss. Revenues too tumbled to ₹250.8 crore in FY21.

Fast forward one month, Chopra and his 16-year-old son had quarantined themselves in a farmhouse near the airport in April 2021. The mood was depressing. The pandemic continued to be unrelenting, there were casualties in Chopra’s family as well, and the business was experiencing wild swings depending on the intensity of the Covid and willingness of the people to travel. Confined to his farmhouse, Chopra was hooked to CNBC for business updates. And one fine day, John Chambers popped up in one of the interactive sessions of the business channel. “These are times when good companies double down,” the former Cisco honcho remarked, recalls Chopra, who was gradually easing into a larger role and staying away from the operational part of the business. “What he said stuck with me,” says Chopra, who decided to press on the pedal.

The guy who inspired Chopra most, though, was staying with him: His son. During his quarantine, the 16-year-old had made a compelling presentation to his father, urging him to relocate to North America, which accounted for over 79 percent of the revenues for RateGain. Dad was impressed but he ignored. The lad didn’t give up and was back with another presentation the next day. This time he pitched himself and wanted to learn the ropes by going abroad.

Chopra was startled with his son’s optimism. “There was gloom all around and this guy is talking about growth and future,” he recalls. The trigger was sufficient to ignite a call to the ailing CFO and start preparing for an IPO. “I was also impressed by the listing performance of bootstrapped and profitable travel firm EaseMyTrip,” he adds. The scene was set to take the IPO plunge.

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Cut to December 17, 2021. The listing happened in a record time. “I think we made history of some sort. The speed was just insanely awesome,” says Chopra, who liberally garnishes his sentences with ‘insanely awesome’. Though the issue price was ₹425, the stock got listed at ₹364.8, a discount of 14.16 percent over the IPO price. Chopra had little to complaint. Reason: There was something ‘insanely awesome’ that took place. “I think the stars got aligned in multiple ways,” he recalls.



First, RateGain was listing on December 17, 2021, a year when the company turned 17. Second, December 17 happened to be his son’s birthday. Third, his son turned 17 on December 17, 2021. “It was a surreal kind of feeling,” he recalls. 2021 was also a time when markets were buoyant. A record ₹1.2 lakh crore was mopped up through IPOs—reportedly 53—as the market shrugged off Covid concerns.


Chopra was happy with the timing. There was a bit of momentum for tech companies, and valuations too seemed right. A clutch of merchant bankers Chopra spoke with presented a rosy picture as well. “Everybody said you would be a billion-dollar company,” he recalls. There were loads of optimism floating in 2021.

The buoyancy carried forward into the New Year. On January 18, 2022, the stock touched a record high of ₹525. The mood was upbeat, and the stock market seemed to mirror the performance of the zero-debt company which closed FY22 at an operating revenue of ₹366.6 crore as against ₹250.8 in the previous fiscal. And RateGain, Chopra underlines, was back in the black. It posted a PAT (profit after tax) of ₹11 crore as against a loss of ₹20 crore and ₹25 crore in FY20 and FY21, respectively. The performance was top-rated, and RateGain had gained whatever it lost during pandemic.

There was a bewitching twist, though. Five months later, the stock slumped to a record low of ₹235 on June 30. It was a staggering fall of 43 percent from the issue price. The public markets globally were in the midst of a price correction, tech stocks were getting battered, and India was no exception.

RateGain was getting grated. For an ‘insanely awesome’ entrepreneur who had seen multiple near-death experiences in the life of his venture, this was another insane low. “I didn’t look at the share price,” says Chopra, alluding to the moment the stock hit rock bottom. He pauses for a while and then makes a candid confession. “I’d be lying if I tell you it didn’t impact me. It did,” he says. You have to feel for people, Chopra continues with his revelation, who bought the share at ₹425—forget the high of ₹525—and were now losing money. “It bothers me,” he says. The stock market report card, he is quick to stress, has nothing to do with the performance of the company.

Chopra points out the financials of the company to make a point. Fourteen years of consecutive profit and growth, two years of losses on the back of pandemic, and then a bounce back in performance. In Q2 of FY23, RateGain’s operating revenue showed a 47 percent growth year over year, and the corresponding percent growth for the first six months of FY23 was 52.7 percent. “I don’t think stock market is a rational reflection of the way we have performed,” he quips. Stock market, Chopra explains, is a reflection of an output of what people think about you. “That’s an output. We have no control over it. What we can change is input,” he says.

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The founder tries to decode the behaviour of the Indian public market. If investors are looking for profit or a path to profitability, then it goes very well with the story of RateGain, contends Chopra. If there are loss-companies, then one would try to join the dots and make some sense of the fall in stock. “Jo abhi profit nahin bana rahi wo kabhi nahin banayegi (those who are not making money now will never post profit),” he says. “It’s simple. It’s not in their DNA. But our DNA is to make money,” he argues. On January 4, 2023, RateGain’s stock was trading at ₹297.75, still much below its offer and listing price. “I can’t control how market behaves. There would be highs and there would be lows,” he says. “One has to live with it,” he adds.



Okay, accepted. But has the life of the founder changed after the listing? Chopra points out the biggest shift. “Responsibility, accountability and determination to fight have gone up by a couple of notches,” he smiles. Business, he reckons, is a marathon, and not a sprint. “In a marathon, you need to keep yourself hydrated. It’s a long run,” he says, adding that the best way to stay hydrated is to just focus on inputs. “I am convinced that eventually the output will catch up with the input if one continues to hustle,” he signs off.