Ixigo IPO: Everything You Need to Know

Le Travenues Technology Limited, the parent company behind the popular online travel agency Ixigo, is set to launch its Initial Public Offering (IPO) on Monday, June 10. This event marks a significant milestone for the company, offering investors an opportunity to participate in its growth.

IPO Details

Bidding Window:
The IPO bidding will be open for three days, starting from June 10 and closing on June 12.

Price Band and Lot Size:
The price band for the Ixigo IPO is set between ₹88 to ₹93 per share, with each share having a face value of ₹1. Retail investors can place bids with a minimum investment of 161 shares, amounting to ₹14,973.

Lead Managers and Registrar

The IPO is being managed by Axis Capital Limited, Dam Capital Advisors Ltd (formerly known as IDFC Securities Ltd), and JM Financial. Link Intime India Private Ltd has been appointed as the registrar for the issue.

Offer Size and Allocation

The Ixigo IPO comprises a fresh issue of 1.29 crore shares aggregating to ₹120 crore and an offer for sale of 6.67 crore shares, totaling ₹620.1 crore. The company has reserved 75% of the net offer for Qualified Institutional Buyers (QIBs), 10% for retail investors, and the remaining 15% for Non-Institutional Investors (NIIs).

Key Dates

• Subscription Window: June 10 to June 12
• Share Allotment Finalization: June 13
• Credit to Demat Accounts and Refunds Initiated: June 14
• Listing on NSE and BSE: Expected on June 18

Financial Performance

Ixigo has shown significant growth and financial stability over recent periods:

• Nine Months Ended December 31, 2023:
  • Revenue from operations: ₹497.1 crore
  • Profit After Tax (PAT): ₹65.71 crore
  • Net Worth: ₹437.13 crore
• Fiscal Year 2023 (FY23):
  • Revenue from operations grew by 34% to ₹517.57 crore compared to ₹384.94 crore in FY22.
  • The company turned profitable with a profit of ₹23.40 crore, reversing a loss of ₹21.09 crore in FY22.
  • Net Worth surged by 9% to ₹373.76 crore from ₹342.69 crore in the preceding fiscal year.

IPO Objectives

The funds raised through the IPO are intended to support various strategic initiatives, including:

1. Working Capital Requirements: To ensure smooth and efficient operations.
2. Investments in Cloud Infrastructure and Technology: Enhancing their technological framework to support future growth.
3. Funding Inorganic Growth: Potential acquisitions to expand market reach and capabilities.

Strengths and Weaknesses

Strengths:

• Market Penetration: Ixigo is a leading OTA with a strong presence in the underserved ‘next billion users’ segment. This segment, comprising users new to the internet and largely from non-Tier I markets, represented 60%-65% of the overall travel market in FY23.
• Technological Advancements: Ixigo leverages advanced technologies and AI tools such as ixigo PLAN, an AI-based trip planner; ixigo Assured Flex for flexible bookings; and TARA, an AI-driven personal travel assistant.
• Diverse Product and Service Mix: The company offers a comprehensive range of services including train, flight, bus, and hotel bookings, enhancing its monetization potential.

Weaknesses:

• Limited Experience as an OTA: Initially starting as a meta search website, Ixigo has less experience operating as a full-fledged OTA compared to some competitors.
• Susceptibility to External Factors: The travel industry is highly sensitive to global uncertainties which could negatively impact Ixigo’s operations.
• Competitive Market: Ixigo faces intense competition from established players like MakeMyTrip, EaseMyTrip, Yatra.com, Cleartrip, PayTM, Amazon, RailYatri, Goibibo, and Redbus.

Company Background

Founded in 2006, Le Travenues Technology Ltd operates under the brand name Ixigo. The company facilitates bookings for trains, flights, buses, and hotels through its platforms. It offers a variety of services including PNR status checks, train seat availability alerts, and train running status updates.

Platforms:
Ixigo’s offerings include the ixigo trains and Confirmtkt app, the ixigo-flights mobile app, and the Abhibus app. As of September 2023, the company claimed the highest app usage among OTAs with 83 million monthly active users, according to data.ai.

Workforce:
The company employs 486 full-time employees and has 4 consultants working under consultancy agreements.

Conclusion

The Ixigo IPO presents a promising investment opportunity given the company’s strong market presence, growth trajectory, and strategic use of technology. However, potential investors should consider the competitive nature of the OTA market and the broader economic factors that could impact the travel industry.