Rategain Travel Technologies Ltd Forensic Report - SOIC x StockScans Report

as of Aug 2026

RateGain's FY2025-26 record is dominated by one event: the debt-funded acquisition of Sojern Inc., which created ₹1,302.64 crore of goodwill, added USD 125 million of debt with parent guarantees, and produced a set of accounting choices that push recurring costs through the P&L while management's "adjusted" metrics exclude them. The audit opinions are unmodified, but the auditor has relied on other auditors for subsidiaries holding the bulk of consolidated assets in every year, and the FY2025 report carried an audit-trail exception. Governance shows two CFO resignations within 12 months and a promoter pledge of 33% of shareholding.

Key findings

  1. Sojern acquisition created ₹1,302.64 crore goodwill and USD 125 million debt, with no impairment ever recognized Major - The Sojern Inc. acquisition on 06 November 2025 generated goodwill of ₹1,302.64 crore, non-deductible for tax. A term loan of USD 125 million was availed for the acquisition, with gross outstanding at 31 Mar 2026 of USD 99.75 million, and the parent's financial guarantee has a maximum exposure of ₹1,290.61 crore against a loan outstanding of ₹936.23 crore. Goodwill impairment testing in FY2025-26 resulted in "no impairment loss," with management stating any reasonably possible change in assumptions would not cause carrying amount to exceed recoverable amount.
  2. Sojern acquisition accounting choices push recurring charges through the P&L while management presents "adjusted" metrics that exclude them Major - Earnout payments contingent on continued employment are accounted as post-combination employee compensation rather than consideration, with ₹9.27 crore expensed in FY2025-26. ESARs with a cash backstop were classified as a financial liability, recognising ₹11.6 crore expense, and transaction costs of ₹32.42 crore were disclosed as exceptional items. Management reported "adjusted PAT" of INR249.9 crores for FY26 against unadjusted PAT of INR194.4 crores, a gap of approximately 30%, with "adjusted" not defined.
  3. Promoter pledged 33% of shareholding in October 2025, two CFOs resigned within 12 months, and promoter remuneration approved at ₹4.03 crore fixed pay Major - On 29 Oct 2025, promoter Mr. Bhanu Chopra encumbered 3,89,65,990 shares (33% of promoter shareholding) in favour of HSBC and Citigroup. Mr. Tanmaya Das resigned as CFO effective May 05, 2025, and Mr. Rohan Mittal resigned effective May 08, 2026. Mr. Chopra's remuneration for 3 years from August 05, 2026 was approved at ₹4,03,00,000 per annum fixed pay with bonus up to 100% of fixed pay.
  4. Cash generation lags profit growth while ₹600 crore QIP proceeds sat unutilised for over a year before being deployed into a debt-funded US acquisition Major - CFO/PAT was 1.20x in FY2025-26, 0.57x in FY2024-25, and 1.04x in FY2023-24. The Company raised ₹600 crore via QIP on 20 November 2023, and 100% of net proceeds remained unutilised as at 31 March 2024 and 31 March 2025. As at 31 March 2026, 100% of QIP net proceeds were utilised towards the Sojern acquisition, financed through external funds of ₹1,106.96 crore and QIP/internal funds of ₹1,115.76 crore.
  5. Audit-trail exception in FY2025, resolved by FY2026; FY2024 also had an exception Major - For FY2025, the auditor reported proper books of account were kept "except for not complying with the requirement of audit trail as stated in (i)(vi) below," with the detailed exception under Rule 11(g) covering audit trail not enabled at database level in primary software and in third-party payroll software for part of the year. For FY2026, the auditor reported the audit trail feature operated throughout the year with no tampering. FY2024 also carried an audit-trail exception under Rule 11(g), so the opinion was not fully unmodified that year. The consolidated auditor relied on other auditors for subsidiaries in FY2022-FY2025, including 2 subsidiaries in FY2024 with ₹304.42 crore assets and ₹354.09 crore revenue.
  6. Related-party lending and guarantees are almost entirely intra-group funding for acquisitions, with no disclosed loans to promoters, directors or KMPs Minor - On 13 Feb 2026, RateGain announced acquisition of 100% equity in its subsidiary RG UK pursuant to conversion of an outstanding loan including interest, at a cost of GBP 82,504,577. The FY2025-26 standalone financial statements state that no loans or advances in the nature of loans were granted to promoters, directors, KMP or their related parties, except to wholly owned subsidiaries. A loan of ₹0.5 crore from an employee fell due during the year and was extended, representing 0.05% of total loans granted.
  7. Two service tax disputes disclosed as contingent liabilities for five years Minor - A ₹5.97 crore service tax demand was decided in the Parent Company's favour by CESTAT order dated 9 October 2025, with the entire demand set aside. A ₹62.4 crore dispute over classification of services remains stayed by the Delhi High Court since FY2019-20, with no further development reported. Both were disclosed as contingent liabilities in annual reports from FY2021-22 through FY2025-26.
  8. Statutory auditor rotated from Walker Chandiok to Deloitte at the 2024 AGM after a 10-year term, with secretarial auditor reappointed for 5 years with unanimous approval Clean - Walker Chandiok & Co. LLP completed 10 years at the 12th AGM on September 16, 2024, when rotation provisions applied. Deloitte Haskins & Sells LLP was appointed for 5 years from that AGM, with a proposed fee of ₹70,00,000 for FY 2024-25, approved with 99.8780% votes in favour. M/s RMG & Associates was appointed as Secretarial Auditors for 5 years from FY2025-26, approved with 99.9996% votes in favour.

What to watch

Bottom line: This is a disclosed and audited record, but the Sojern acquisition has changed the company's shape: it added significant debt, created a large goodwill balance that has never been impaired, and introduced accounting choices that make reported profit and management's "adjusted" metrics diverge by roughly 30%. The risk sits in whether Sojern performs against its targets, which determines both the earn-out expense and the goodwill impairment test. Watch the quarterly loan instalments, the earn-out true-ups, and the first full-year impairment test.