Ixigo IPO: 5 Things to Know

The Indian stock market is buzzing with Initial Public Offerings (IPOs). India has already secured the second-largest IPO market position globally, surpassing China and raising a staggering US$ 4 bn so far this year.

This comes despite raising about 45% less than all of 2023, highlighting both the current momentum and a year-over-year comparison. India has already crossed the 100 mark for IPOs in 2024, with 113 companies going public year-to-date.

This momentum is expected to continue with the return of the NDA government, fostering policy continuity and investor confidence.

Amid this ongoing IPO buzz, online travel aggregator Ixigo is set to hit the street. Here's all you need to know about the Ixigo IPO.

About Ixigo

Le Travenues Technology Limited, trading as Ixigo, is a pioneering technology firm based in India, dedicated to enhancing the travel planning and booking experience for its users.

Established to cater predominantly to rail, air, bus, and hotel bookings, Ixigo leverages advanced technologies such as artificial intelligence, machine learning, and data science.

These innovations are embedded within the company's online travel agency (OTA) platforms, which include both websites and mobile applications.

Ixigo states that its mission is to be the most customer-centric travel company, aiming to provide the ultimate experience for its users through its focus on travel utility and seamless customer service.

The company's target demographic includes travellers from tier-2 and tier-3 cities, whom they reach with localised content and app features designed to address specific travel challenges faced by these populations.

Here are the key details of the IPO.

Issue period: 10 June 2024 to 12 June 2024

Type of issue: Book Built Issue

Price band: Rs 88-93 per share

Face value: Rs 1 per equity share

Lot size: 161 shares

Application limit: Maximum thirteen lots for retail investors. Retail investors can make an application for a minimum of Rs 14,973 for one lot (161 shares).

Tentative IPO allotment date: 13 June 2024

Tentative listing date: 18 May 2024

The IPO is a mix of fresh issuance of shares worth Rs 1.2 bn and an offer-for-sale (OFS) of 66,677,674 equity shares by the existing shareholders.

Apart from this, the company had filed a draft red herring prospectus with the regulator in August 2021 to raise Rs 16 bn via a maiden public issue. The public issue had received approval from the regulator to launch an IPO in June 2023, but it did not launch.

#2 Factors Setting this IPO Apart

• Ixigo was recognised as the leading OTA for the 'next billion users', with the highest monthly active users for mobile apps across all key OTAs as of 30 September 2023. This is a testament to its expansive reach and tailored services.
• In financial year 2023, the company was ranked as the second-largest OTA in India based on consolidated revenue from operations.
• Ixigo's monthly active user (MAU) base and session engagement per user is markedly higher than all other prominent OTA platforms and standalone apps.
• Ixigo leverages cutting-edge technology as the basis for its operating leverage, resulting in significant efficiencies across business processes and operations.
• The company employs artificial intelligence, data science, and machine learning to transform travel information and crowd-sourced data into actionable business intelligence. This enhances Ixigo's travel offerings and boosts operational efficiency.
• Ixigo has built strong consumer travel brands with a user-first approach, ensuring high customer satisfaction and loyalty.
• The company's business model is diversified, featuring high operating leverage and an organic flywheel effect that drives sustainable growth.

#3 A Look at its Financials

The company has demonstrated revenue growth of 93% on a compounded annual growth rate (CAGR) basis over the period from the financial year 2021 to 2023.

This performance can be credited to the growing customer base and a continuous expansion.

While there was a good increase in revenue, the net profit of the company also increased from Rs 75.3 m in March 2021 to Rs 233.9 m in March 2023, at a CAGR of 76%.

Ixigo's Financial Snapshot (2021-23)

Particulars	31-Mar-21	31-Mar-22	31-Mar-23
Revenues (Rs in m)	1,384.10	3,849.40	5,175.70
Revenue Growth (%)	-	178.1	34.4
Net Profit (Rs in m)	75.3	-210.9	233.9
Net Worth (Rs in bn)	299.3	3,426.90	3,737.60

Data Source: Company's Draft Red Herring Prospectus (DRHP)

For the nine months ending December 2023, the company's revenue rose 35% YoY to Rs 4,970.9 m up from Rs 3,787.2 m a year back. While the company's net profit jumped more than two-and-a-half times to Rs 657.1 m compared with in the year-ago period.

#4 Peer Comparison

As per the company's red herring prospectus, these are the industry peers of Ixigo.

Peer Comparison

Company	Total Revenue (Rs in million)	EPS (Basic) (in Rs)	Return on Net Worth (%)
Le Travenues Technology (Ixigo)	5,175.70	0.6	5.7
Easy Trip Planners	4,641.90	0.8	36.2
Yatra Online	3,974.70	0.7	4.5

Data Source: Company's Red Herring Prospectus (RHP)

From the sales perspective, Ixigo leads in terms of total revenue, indicating a strong market presence and ability to generate higher sales compared to its peers.

Easy Trip Planners has the highest EPS, reflecting better profitability per share. Ixigo's EPS is slightly lower than Yatra Online.

Easy Trip Planners significantly outperforms in return on net worth, demonstrating superior efficiency in generating returns from shareholders' equity. Ixigo has a higher return on net worth compared to Yatra Online but is considerably behind Easy Trip Planners.

#5 Risk Factors

• Ixigo's operational stability in the travel sector can be affected by external factors. For example, natural disasters, pandemic situations, climate etc.
• The company has partnered with the Indian Railway Catering and Tourism Corporation (IRCTC), with its train booking services relying solely on that contractual agreement. IRCTC holds the OTA's core services. Needless to say, if this partnership falls through or is even put on hold temporarily, Ixigo may suffer substantial losses.
• A significant number of the services are dependent on external entities and companies and they in return grant commissions and incentives. In case the commissions and incentives are reduced or eliminated the business will have an adverse effect.
• Some services are based on crowd-sourced information and any misleading or false information may degrade the user experience resulting in a loss of customer base.
• Further, limited OTA experience may hinder Ixigo's growth and stability.

Conclusion

The rising internet penetration in India has been a priority for the government due to its multiplier effects on economic growth, industry, and corporate demand.

Government policy support is strongly facilitating the organic reach of telecom houses. In 2011, the government of India approved the Bharat Net Project to connect 250,000 gram panchayats with high-speed broadband. This will help Ixigo's growth.

Market Opportunity Across Indian travel Industry

The total Indian travel market as represented by modes of air, rail, road and hotel is estimated at around Rs 3.8 trillion (tn) in FY23 and expected to grow at a CAGR of around 9% to reach Rs 5.8 trillion by FY28.

The Indian travel market anticipates 8% growth, with online travel poised for 12% expansion, propelled by digital advancements.

The Indian OTA industry is estimated to be at Rs 12.4 bn in FY23 and is expected to reach Rs 28 bn in FY28, with a CAGR of 18%.

Nevertheless, it is always prudent to conduct thorough research before making any investment decisions. Ensure that the investment aligns with your financial objectives and matches your risk tolerance level.

For more information on IPOs, check out the list of upcoming IPOs.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...