Ixigo IPO: A Ticket to Simplifying Travel (and Potentially Big Returns)?

The IPO season is coming on strong for 2024 India, as many well-known companies are planning to raise money via the public. Raising money via an Initial Public Offering and transforming from a private to a public venture is often a big decision. Yet multiple IPOs have already made their presence known in the market. One such company is Ixigo’s parent, Le Travenues Technology Ltd.

Calling all travel enthusiasts and potential investors who are always on the lookout for “The IPO”! Buckle up for the Le Travenues IPO (aka Ixigo IPO). The company is revolutionising the travel experience for the "Next Billion Users" in India, and it might be a good investment for you.

Le Travenues Technology Ltd.'s IPO will open from 10 June 2024 till 12 June 2024 and aims to raise ₹740 crore via this issue. With a price band ranging between ₹88 - ₹93 per equity share, the IPO will have a minimum lot size of 161 shares (with further bids in multiples).

We'll delve into the company's history, its unique strengths in the travel tech space, and the crucial details of the IPO itself. So, whether you're a seasoned investor or simply curious about this exciting development, keep reading to learn everything you need to know about Ixigo's IPO!

IPO Details

Le Travenues IPO will have a total issue size of 79,580,900 shares, subdivided into a fresh issue size of 12,903,226 shares and an Offer For Sale of 66,677,674 shares. The IPO issue will be available from 10 to 12 June 2024 and listed on both NSE and BSE.

Here’s a brief listing of all the details regarding this upcoming IPO:

Ixigo IPO Share Offer

Unlike many IPOs, Ixigo's offering isn't categorised by specific investor types like retail or institutional investors.

Here's how the shares are offered:

a. Book Building Process: The entire offering of ₹740.10 crores (at the upper price band) is made through a book-building process.

b. Allocation:

A minimum of 75% of the shares are reserved for Qualified Institutional Buyers (QIBs). These are large institutions like banks, mutual funds, and insurance companies.
A maximum of 15% of the shares are allocated to Non-Institutional Investors (NIIs). These can be corporate entities or high-net-worth individuals.
The remaining 10% is available for Retail Individual Investors like you and me.

So, while there's no specific category-wise share offer, the book-building process determines how much goes to each investor segment based on the minimum and maximum percentages mentioned above. Refer to the above image for allotment details. 👆

If you are interested to read about the IPO Allotment Process, then click on this link. 👈

Online Travel Industry Overview

According to the latest provisional estimate from the World Bank, India's per capita GDP rose from $1,958 (₹1.62 lakh) in 2017 to $2,389 (₹1.98 lakh) in 2022 and is projected to increase to $3,990 (₹3.3 lakh) in Fiscal 2028.

As per Le Travenues Red Herring Prospectus (RHP), India had the third fastest-growing travel & tourism contribution to GDP in 2019, with a 4.9% annual growth in travel and tourism-related GDP.

The industry is expected to grow even further as the number of NBUs continues to increase. NBUs will support all internet-based sectors, including the airline and train industry. This market encompasses all travel demand originating from and/or concluding in tier II, III, and rural areas in India, as well as "new to Internet" users from the middle and lower income group of tier I cities.

The travel industry has seen a significant increase in international air travel, especially for Indian citizens. As of March 2023, the Henley Passport Index indicates that approximately 60 countries provide Visa-on-Arrival and Visa-Free facilities to Indian passport holders.

The growth in international travel is fueled by recent changes in visa policies, with countries such as Malaysia, Thailand, Sri Lanka, and Kenya waiving visa requirements for Indian citizens.

This has led to a smooth rise in GDP contribution to Indian tourism over the past few years. As per Ixigo’s RHP, the GDP contribution peaked at 9.7% in FY23 from FY22.

About Le Travenues Technology Ltd.

With a vision to be the best customer-centric online travel agency in town (global), Le Travenues Technology Ltd. has been in the market since June 2006. Better known by its consumer brand, Ixigo, Le Travenues Technology has become a prominent player in the Indian travel industry. That’s why this upcoming IPO is commonly referred to as Ixigo's IPO.

But its journey began modestly, evolving from a metasearch engine to a comprehensive travel booking platform. Here's a basic recital of the journey the company has taken ever since its establishment:

• Founded by IIT Kanpur alumni Rajnish Kumar and Aloke Bajpai, the firm was initially incorporated as a private limited company.
• Launched as a flight metasearch website, Le Travenues Technology began aggregating deals from various airlines.
• In 2008, it expanded its services to include a hotel search engine. Then came 2014, and with it came the launch of the flagship “Ixigo Trains App”. This marked a shift from a metasearch platform to a full-fledged Online Travel Agency (OTA) allowing passengers to book flights and train tickets.
• In 2021, it converted to a public limited company and renamed “Le Travenues Technology Limited”.
• Acquired Confirmtkt, a popular train discovery and ticketing platform, solidifying its position in the train booking market.
• Later, in 2021, it acquired AbhiBus, a bus ticket booking and fleet management portal, expanding its offerings to include bus travel.

Amidst all its achievements, Ixigo shines the brightest. Here’s a brief discussion on the why.

Ixigo: The Flagship Brand of Le Travenues

Ixigo serves as the umbrella brand for Le Travenues Technology Ltd.'s consumer-facing products. It offers a mobile app and website for booking flights, hotels, trains, buses, and cabs.

Ixigo leverages AI and user data to provide features like PNR status updates, seat availability alerts, and train delay predictions, catering to travellers' specific needs.

Le Travenues, through Ixigo, also offers travel planning tools and resources. Users can access curated itineraries, destination guides, and travel tips to plan their trips efficiently. This Online Travel Agency (OTA) emphasises customer experience, offering easy cancellation and 24/7 customer support.

These services and features have led to Ixigo generating around 66 million monthly active users as of May 2023. It is experiencing a growth rate of more than 8 million downloads. Additionally, it maintains an annual run rate of 50 million bookings.

Achievements Over The Years

Amidst all the other OTAs in India, Le Travenues Technology is ahead in multiple sectors. Here are a few of them:

• Highest app usage with 83 million active users.
• Also hold the position for being the fastest growing OTA in terms of app downloads with the highest being 4.9 million in September 2023.
• In 2022, Ixigo trains app was the 8th most downloaded travel & navigation app globally.
• In 2022, the Ixigo trains and ConfirmTkt app were both recognised as top 10 travel apps in India with Ixigo trains app securing the 2nd position and ConfirmTkt ranking 7th in terms of the most downloaded travel apps.

Look at the infographic below to get a clear picture of Le Travenues' penetration in the nation. ⬇️

Now that we have covered the story of the Le Travenues Foundation, let’s jump to what matters most to investors like you and me. Yes! I am talking about numbers, dear reader!

Le Travenues Financials

With a market capitalisation of ₹3,603.04 crore, Le Travenues has portrayed satisfactory financials over the years, especially in FY23.

With a rise of 34.46% in total income and 20.31% in total expenses, the financials of Le Travenues look good. Although the company reported a loss of 2,109.4 crore in FY22, it has succeeded in changing the tides by showing a net profit of 2,339.6 crore in FY23.

Le Travenues Technology Ltd recently announced that its current shareholders have successfully sold equities amounting to over ₹176 crore in a pre-IPO round.

Ixigo's co-founders Aloke Bajpai and Rajnish Kumar confirm that the buyers of these shares include Ashoka India Equity Investment Trust Plc, Tata Multi-Asset Opportunities Fund, Tata Digital India Fund, Bay Capital Holdings, and Steadview Capital Mauritius.

To get an in-depth understanding of the company’s financial position, make sure to go through its RHP, which you can easily access from here. Or if you are one of those who find it challenging to read annual reports, then don’t worry; we have all been there.

My suggestion? Skip the complicated and make numbers easy with Finology Ticker. Just click on this link and you can find a simplified version of Profit & Loss Statement, Balance Sheet, and even Cash Flow Statement.

The Bottom Line

Ixigo has been a well known name in the travel booking realm as millions daily rely on it, either to book travel tickets or to check train & flight status. But, the one thing people need to remember here is that the upcoming IPO is not singularly about Ixigo. It encompasses the parent company of India's leading travel booking platform, Le Travenues.

Hence, thoroughly examine the company’s financials, assess market trends, and understand your risk tolerance before making an investment decision.

Whether you choose to invest or not, Ixigo's IPO is a significant development in the Indian travel landscape. With its wings spread and ready for takeoff, Ixigo's journey promises to be an interesting one to watch. So, fasten your seatbelts and stay tuned with Finology Insider for this potential high-flyer!

*Disclaimer: The stocks and companies discussed above aren't a recommendation from Finology Insider and shall not be construed as a replacement for professional advice. Consult a professional or conduct the necessary research before making investment decisions.