Ixigo (Le Travenues Technology) IPO: Ixigo (Le Travenues Technology Ltd) is a leading Indian digital travel platform. They empower travellers to plan, book, and manage their trips across rail, air, buses, and hotels. Ixigo leverages AI, machine learning, and data science to assist users in making informed travel decisions and offers various travel utility tools like fare and PNR predictions, running status updates, and deal discovery. They operate within the online travel agency (OTA) industry, a booming section in India driven by increasing internet penetration and disposable incomes.
Ixigo (Le Travenues Technology) IPO Details:
Ixigo filed its DRHP (draft red herring prospectus) in August 2021 and received SEBI approval in December 2021. However, the exact dates for the IPO (open/close, listing) are still not announced. The offer size will be a combination of a fresh issue and an offer for sale (OFS). The price band is also yet to be finalized.
Latest Updates:
1. Delay in IPO: Despite receiving SEBI approval in December 2021, the lack of confirmed IPO dates might generate some uncertainty among investors. This delay could be due to market conditions or other company-specific factors.
2. Strong Financials: Ixigo reported a profit in Q2 FY24 after incurring losses for several quarters. This turnaround could boost investor confidence, but sustained profitability remains crucial for long-term success.
3. Increased Competition: The Indian OTA market is fiercely competitive with established players like MakeMyTrip and EaseMyTrip. Investors should consider Ixigo’s competitive positioning and differentiation strategies.
Ixigo (Le Travenues Technology) Offer Details:
Securities Offered:
The Ixigo IPO will only offer equity shares of the company. This means that investors who participate in the IPO will become partial owners of Le Travenues Technology Ltd.
Reservation Percentages:
The following percentages of the total offer size are reserved for different investor categories:
- Retail Individual Investors (RIIs): 10%
- Qualified Institutional Buyers (QIBs): 75%
- Non-Institutional Investors (NIIs): 15%
Minimum Lot Size and Investment Amount:
The minimum lot size for the Ixigo IPO is not yet decided. It will be determined by the company and disclosed in the final prospectus before the issue opens. However, based on past precedent for IPOs of similar size, the minimum lot size can be expected to be around 100 shares.
Ixigo (Le Travenues Technology) Company Profile:
History and Operations:
- Founded in 2007: Launched as a flight metasearch website by IIT Kanpur alumni Rajnish Kumar and Aloke Bajpai.
- Evolving into a travel powerhouse: Over the years, expanded to encompass trains, buses, hotels, and travel utility tools.
- AI-powered travel companion: Leverages AI and machine learning for fare predictions, PNR updates, running status alerts, and deal discovery.
- Mobile-first approach: Popular mobile apps for flight, train, and bus booking with over 150 million downloads.
Market Position and Share:
- Leading Indian OTA: Ranks among the top players in the Indian online travel agency (OTA) market.
- Market share: Difficult to pinpoint exact market share due to dynamic competition, but considered a significant player in specific segments like train travel.
- Focus on niche segments: Strong presence in train ticketing (acquired Confirmtkt in 2021) and bus bookings (acquired AbhiBus in 2021).
Competitive Landscape:
- Key competitors: MakeMyTrip, EaseMyTrip, Yatra, Cleartrip.
- Competitive advantages:
- AI-driven personalization: Tailored travel recommendations and fare alerts.
- Focus on niche segments: Strong foothold in train and bus travel.
- User-friendly mobile apps: High app download and engagement rates.
- Focus on customer experience: Innovative features like station alarms and flexible flight bookings.
Milestones and Achievements:
- World’s 6th most downloaded travel app: As per 2018 report by SensorTower.
- Phocuswright People’s Choice Award: For its AI-powered voice assistant TARA.
- Google India App Summit Award: For best UI/UX in its flight app.
- Turnaround in financial performance: Reported profit in Q2 FY24 after consistent losses.
Additional Information:
- Subsidiaries: Le Travenues Technology Pvt Ltd is the parent company with no listed subsidiaries.
- Partnerships: Collaborates with various travel providers, airlines, and payment gateways.
Ixigo (Le Travenues Technology) Financials:
Recent Performance:
- Revenue growth: Ixigo has shown promising revenue growth in recent quarters. After incurring losses for several quarters, the company reported a profit in Q2 FY24, marking a significant turnaround. Revenue from operations grew to Rs 501 crore in FY23 from Rs 380 crore in FY22, translating to a 32% increase.
- Profitability: The recent profitability is a crucial step for Ixigo, but maintaining sustained profitability remains crucial for investor confidence.
- Debt levels: As of June 30, 2023, Ixigo had total debt of Rs 62 crore against total equity of Rs 297 crore, resulting in a debt-to-equity ratio of 0.21. This ratio is relatively low compared to industry benchmarks, indicating a healthy balance sheet and low financial risk.
Key Financial Ratios:
- Price-to-Earnings (P/E) Ratio: Due to the lack of confirmed IPO dates and final issue price, the P/E ratio cannot be calculated yet. It will be available once the IPO details are finalized.
- Earnings per Share (EPS): Similar to P/E ratio, the EPS can only be calculated after the IPO pricing is decided.
- Debt-to-Equity Ratio: As mentioned earlier, Ixigo’s debt-to-equity ratio of 0.21 is lower than the industry average for the OTA sector, which typically ranges from 0.5 to 1. This indicates a stronger financial position with less reliance on debt.
Industry Benchmarks:
It’s crucial to compare Ixigo’s financial ratios to relevant industry benchmarks. Here’s a table providing approximate ranges for key ratios in the Indian OTA sector:
| Ratio | Benchmark Range | Ixigo as of June 30, 2023 |
|---|---|---|
| Debt-to-Equity Ratio | 0.5 – 1 | 0.21 |
| Price-to-Earnings (P/E) Ratio | 20 – 40 | N/A (not yet available) |
| Earnings per Share (EPS) | Rs 5 – Rs 15 | N/A (not yet available) |
Ixigo IPO Objectives:
Ixigo’s decision to go public is driven by multiple objectives, and the company plans to utilize the raised funds in various ways to further its growth and expansion. Here’s a breakdown:
Reasons for Going Public:
- Raise capital for growth: The primary objective is to raise funds to fuel the company’s ambitious growth plans. These include expanding into new travel segments, developing its AI and data science capabilities, and enhancing marketing and brand awareness.
- Increase liquidity and shareholder value: Listing on the stock exchange provides existing shareholders, such as founders and early investors, with an opportunity to exit their investments and unlock liquidity. This can also create a market for the company’s shares, potentially increasing their value over time.
- Enhance brand image and reputation: Becoming a publicly traded company can boost Ixigo’s brand image and credibility, potentially attracting new talent, customers, and partnerships.
Utilization of Raised Funds:
Ixigo has outlined the following ways it plans to use the funds raised through the IPO:
- Organic growth initiatives: This includes expanding into new travel segments like vacation rentals and cruises, enhancing its mobile app functionalities, and developing personalized travel recommendations through AI.
- Inorganic growth initiatives: The company may consider strategic acquisitions of relevant businesses or technologies to strengthen its market position and diversify its offerings.
- General corporate purposes: This could encompass working capital needs, debt repayment, and potential investments in technology infrastructure.
Ixigo (Le Travenues Technology) Lead Managers and Registrar:
Lead Managers:
Ixigo’s IPO will be managed by a consortium of five lead managers, each with extensive experience in handling similar offerings in the Indian capital market.
- Axis Capital Limited: A leading full-service investment bank with a strong track record in managing successful IPOs, including recent offerings like Zomato, Nykaa, and Glenmark Life Sciences.
- ICICI Securities Limited: Another major player in the Indian investment banking landscape, known for its expertise in IPO execution and distribution. Recent mandates include Sona BLW Precision Forgings, Glenmark Life Sciences, and Indigo Paints.
- IIFL Securities Limited: A prominent financial services provider with a proven track record in IPO management. Some recent examples include Zomato, Macrotech Developers, and Glenmark Life Sciences.
- Kotak Mahindra Capital Company Limited: A leading investment bank and financial services provider with significant experience in IPOs. Recent successful offerings include Zomato, Sona BLW Precision Forgings, and Macrotech Developers.
- Yes Bank Limited: A major private sector bank in India with a growing presence in investment banking. Their recent IPO mandates include Glenmark Life Sciences, Indigo Paints, and Sona BLW Precision Forgings.
Registrar:
The registrar for the Ixigo IPO will be Link Intime India Pvt Ltd. This company is a leading share registrar and transfer agent in India, catering to a diverse clientele across various industries. They have a proven track record of handling complex IPOs and ensuring smooth investor services.
Ixigo (Le Travenues Technology) Risks and Concerns:
Investing in any IPO, including Ixigo’s, involves inherent risks and uncertainties. Before making any investment decisions, it’s crucial to be aware of potential red flags and challenges the company faces.
Industry Headwinds:
- Cyclical nature of travel industry: Economic downturns, political instability, and natural disasters can significantly impact travel demand, affecting Ixigo’s revenue and profitability.
- Intense competition: The Indian online travel agency (OTA) market is fiercely competitive, with well-established players like MakeMyTrip and EaseMyTrip holding significant market share. Ixigo needs to differentiate itself and maintain competitive pricing to stand out.
- Regulatory landscape: Changes in government regulations for the travel industry or data privacy could disrupt Ixigo’s operations and business model.
Company-Specific Challenges:
- Unproven profitability: While Ixigo recently reported a profit, it has historically incurred losses. Sustaining profitability beyond a single quarter is crucial for investor confidence.
- Reliance on third-party providers: Ixigo is reliant on partnerships with airlines, hotels, and other travel providers for its inventory and services. Changes in these partnerships or their pricing could impact margins and operations.
- Technology dependence: Ixigo’s AI-powered features and mobile apps are core to its value proposition. Any technical glitches or security vulnerabilities could damage brand reputation and user trust.
Financial Health Analysis:
- Positive signs: Ixigo’s recent profitability and low debt-to-equity ratio are positive indicators.
- Red flags: Historical losses, dependence on single profitable quarter, and small size compared to competitors warrant caution.
Also Read: How to Apply for an IPO?
