Ixigo IPO Review 2024: Travel opens up new horizons, allowing us to explore diverse cultures, landscapes, and experiences that broaden our perspectives. This IPO review delves into Ixigo, a leading online travel agency in India.

The IPO will open for subscription on June 10, 2024, and close on June 12, 2024. In this article, we will look at Ixigo IPO Review 2024 and analyze its strengths, weaknesses, financials and GMP. Keep reading to find out!  

Ixigo IPO Review 2024 – Company Overview

Ixigo (Le Travenues Technology) was founded in 2006 and is an online travel agency (OTA) that enables travellers to book train, flight, and bus tickets as well as hotels via its OTA platforms under the brand name “ixigo”.

Ixigo offers a wide range of services including PNR status and confirmation predictions, train seat availability alerts, train running status updates and delay predictions, alternative route or transportation planning, flight status updates, automated web check-in, bus running status, price and availability alerts, deal discovery, destination content, personalized recommendations, instant fare alerts for flights, AI-based travel planning service and automated customer support.

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The various OTA platforms offered by ixigo include:

  1. The ixigo trains and Confirmtkt app: These facilitate travel planning and booking by enabling users to search for available train tickets across India, book and pay for tickets, receive tickets through various fulfilment methods, access real-time information on train arrivals and departures, and avail the required post-sales support.
  2. ixigo-flights mobile app: It allows users to search and book air tickets, train tickets, buses, and hotels. Users can access past and future bookings, check and amend booking details, and request e-tickets and details via messaging platforms.
  3. Abhibus app: This app allows users to check bus amenities, compare booking prices, check bus schedules on the desired route, and use other facilities. 

According to data.ai in September 2023, Ixigo has the highest app usage among OTAs with a cumulative 83 million monthly active users across its apps.

Recently, the company introduced ixigo PLAN, an intelligent travel planner powered by AI. This tool assists travelers in creating detailed itineraries and accessing real-time destination information. Furthermore, the company has unveiled a generative AI plugin that facilitates conversational interactions with ixigo PLAN.

In addition, Ixigo has rolled out a new service called ixigo Assured Flex. This service allows customers to purchase fully flexible air or rail tickets with no extra charges for cancellation or rebooking (excluding the price difference) for all domestic flights and rail bookings, at an affordable price.

Ixigo IPO Review 2024 – Industry Overview

According to the World Travel & Tourism Council (“WTTC”), in Fiscal 2023, travel and tourism spending in India amounted to ₹ 16.5 trillion, making up 9.7% of the country’s GDP. This contribution is projected to experience robust growth in the coming years. It encompasses not only expenses on transportation and lodging but also covers spending on cultural activities, sports, recreation, entertainment, retail, food and beverage, as well as visitor exports, by both residents and visitors.

Currently, the Indian travel and tourism market for air, road, air and hotels accounts for around ₹ 3,808 billion and is expected to grow at a CAGR of 9% and reach ₹5,904 billion in Fiscal 2028. 

In addition, the increasing digitization of inventory, primarily due to the COVID-19 pandemic, has led to a surge in online bookings across all modes of travel. The overall online travel industry is projected to grow by 13%. This growth will primarily be led by growth in online segments of the bus at 18% and air at 15%.

As of Fiscal 2023, the railway sector has the highest online booking penetration among all travel sectors in India, with 81% of reserved train tickets being booked online. Meanwhile, 70% of air travel bookings were made online in Fiscal 2023. However, the online penetration of hotel bookings remains low at 32%, and only 19% of bus bookings were made online in the same period.

Ixigo IPO Review 2024 – Financials

If we look at the financials of Ixigo (Le Travenues Technology), we can find out that its revenues have significantly increased from ₹138.41 crores in FY21 to ₹517.57 crores in FY23. 

Similarly, the profits of Ixigo also increased from ₹7.53 crores in FY21 to ₹23.40 crores in FY23. But, the company has incurred a loss in FY22 due to a huge rise in its expenses. 

In the nine months of FY24, the company’s revenues and net profits stood at ₹678.71 crores and ₹65.71 crores respectively which is greater than the entire earnings of FY23.

Furthermore, the company has no long-term borrowings which provides it with sufficient leverage to avail debt funding in future.

A Comparison with the listed Peers

The listed peers in the industry include Easy Trip Planner and Yatra Online. The following image will give you the Key Performance Indicators of the company along with listed industry peers:

(Source: RHP of the company)

Strengths of the Company

  • In the financial year 2023, Ixigo and ConfirmTkt combined held a 51% market share in rail bookings among online travel agencies (OTAs). Furthermore, in the first half of the financial year 2024, they captured 5.2% of the total OTA airline market volume. Additionally, Abhibus held a market share of 12.5% in the first half of FY24, making it the second-largest OTA in India.
  • The company leverages artificial intelligence, data science, and machine learning to convert its travel data and user-generated information into valuable business insights, enhancing its travel services and streamlining its operations.
  • The company uses open-source technologies to lower its total cost of ownership of infrastructure. Furthermore, the company uses selectively available software to ensure that as it grows its users and queries, it incurs only incremental expenditure towards software and licensing costs.
  • The company has a cost-efficient online marketing channel primarily consist of search engine optimisation, app store optimisation, and paid search engine marketing which focuses on organically improving search engine rankings and app stores with quality content to improve user ratings and reviews of its OTA platforms.
  • The company has a comprehensive mix of product and service offerings with a presence across trains, flights, buses and hotel businesses, addressing the online travel market in India allowing it to monetise all aspects of the OTA platforms. 

Weaknesses of the Company

  • The train ticketing services depend on the company’s agreement with IRCTC. The termination of this agreement could preclude the company from undertaking its train ticketing services which could adversely affect its business.
  • The primary focus of the company is expanding its customer base through sales and marketing activities. The cost incurred by the company for this has progressively increased and the company cannot guarantee these costs will be proportionate to the number of customers it can acquire.
  • The company primarily generates revenue from commissions, incentives, and other compensation it receives from its travel suppliers. Any reduction or elimination in these compensations could adversely affect the company’s business.
  • The company’s business depends on its relationships with a broad range of travel suppliers. Any adverse changes in these relationships, or an inability to enter into new relationships, could negatively affect the company’s business.
  • The company relies on third-party service providers for a significant portion of its operational services. A failure from these providers to meet the company requirements can disrupt the company’s operations.

Ixigo IPO Review 2024 – GMP

The shares of Ixigo traded at a premium of 32.26% in the grey market on June 6, 2024. The shares tarded at Rs.123. This gives it a premium of Rs. 30 per share over the cap price of Rs 93. 

Ixigo IPO Review 2024 – Key IPO Information

ParticularsDetails
IPO Size₹740.10 Cr
Fresh Issue₹120.00 Cr
Offer for Sale (OFS)₹620.10 Cr
Opening dateJune 10, 2024
Closing dateJune 12, 2024
Face Value₹1 per share
Price Band₹88 to ₹93 per share
Lot Size161 Shares
Minimum Lot Size1
Maximum Lot Size13 (2093 shares)
Listing DateJune 18, 2024

Book Running Lead Manager: Axis Capital Limited, DAM Capital Advisors Limited, JM Financial Limited

Registrar to the Offer: Link Intime India Private Limited 

Promoters of the Company

There are no identifiable promoters in the company The details of the offer for the sale by the selling shareholders are listed below:

Name of Selling ShareholderTypeNumber of Equity Shares of the face value of ₹ 1 each offered/amountWeighted average cost of acquisition per Equity Share(1) (in ₹)
SAIF Partners India IV LimitedSelling ShareholderUp to 19,437,465 Equity Shares7.14
Peak XV Partners Investments VSelling ShareholderUp to 13,024,000 Equity Shares11.32
Aloke BajpaiSelling ShareholderUp to 11,950,000 Equity Shares0.86
Rajnish KumarSelling ShareholderUp to 11,950,000 Equity Shares0.37
Micromax Informatics LimitedSelling ShareholderUp to 5,486,893 Equity Shares8.55
Placid HoldingsSelling ShareholderUp to 3,048,375 Equity Shares81
Catalyst Trusteeship Limited (erstwhile Milestone Trusteeship Services Private Limited) as the trustee of Madison India Opportunities Trust FundSelling ShareholderUp to 1,333,513 Equity Shares69.45
Madison India Capital HCSelling ShareholderUp to 447,428 Equity Shares81

The Objective of the Issue

The net proceeds from the fresh issue made by the company will be utilized for the following purposes:

  1. Funding the partial working capital requirements of the company
  2. Investing in cloud infrastructure and technology
  3. Funding inorganic growth through undisclosed acquisitions and other strategic initiatives.
  4. General corporate purposes.

Conclusion

In this article, we looked at the details of Ixigo IPO Review 2024. The company dominant market share in rail bookings and a growing presence in airline and bus bookings. With its comprehensive product offerings, leveraging AI and data analytics, and cost-efficient marketing strategies

However, some risks include its dependence on IRCTC for train ticketing services, rising customer acquisition costs, reliance on travel suppliers for commissions, and potential disruptions from third-party service providers.

Overall, Ixigo IPO presents an attractive investment opportunity in the rapidly growing online travel space, but investors should carefully evaluate the risks and prospects before participating in the IPO.

What do think the future holds for the company? Are you applying for the IPO? Let us know in the comments below.

Written by Aaron Vas

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