Ebix to acquire Yatra Online, shares spike 20% pre-market

Yatra Online

Yatra Online is up 20% pre-market on news that a partnership with Ebix may create a new day for the travel services industry in India. A press release today shows the potential for both companies to gain from collaboration on their related service models.

As a major corporate travel services platform with over 800 corporate customers, Yatra Online handles bookings, logistics and more for cruises, business trips and all sorts of related service provisions. Its platform handles real-time bookings for over 100,000 hotels in India and a million hotels globally.

Ebix works in the on-demand software field and provides a variety of electronic services related to finance, insurance, healthcare and more, as well as e-learning operations.

Yatra’s pre-market spike brings the equity to a new high not seen since a major spike this March where the YATR stock rose 25% in a day before cresting around $5.25 per share – since then, a slow march cratered Yatra down to a low of $3.59 July 3. Now, the stock’s prospects seem to be turning around, based on its entry into the wide world of digital bookings analytics and vendor service management.

Could further increases be in store?

Responding to the plan, Dhruv Shringi, YATR Co-founder and CEO said Yatra Online is “pleased to announce this agreement with Ebix, which provides our shareholders with the opportunity to participate in the significant upside potential of one of the fastest growing multinational On-Demand software and E-commerce services companies in the world.”

However, the move could be abundantly good for Ebix, too, as the company looks to consolidate its thought leadership to become a player in digital transactions (think a regional form of Apple Pay or something like that):

“The acquisition of Yatra would lend itself to significant synergies and the emergence of EbixCash as India’s largest and most profitable travel services company, besides being the largest enterprise financial exchange in the country,” Ebix Chairman, President and CEO Robin Raina said in a press statement. “Over the last few months, we have evolved a detailed synergistic plan, that once fully executed can provide between 40 to 75 cents of accretion to the Ebix non-GAAP EPS. We are excited by the cross-selling opportunities that this combination provides us, while further strengthening our future EbixCash IPO offering.”

Look for the partnership to drive YATR higher as its prior stock slump might suggest that the equity was severely undervalued. Part of the key will be how much of the gains the equity holds during the market day.