Ixigo, a popular travel app in India, is gearing up for a significant milestone with its Initial Public Offering (IPO) set to launch on June 10. Let's delve into what this means for Ixigo, investors, and the travel industry.
Company Overview
Le Travenues Technology Limited, founded in 2006 by Aloke Bajpai and Rajnish Kumar, operates as an online travel agency (OTA) under the brand name "Ixigo." The platform enables travellers to book train, flight, and bus tickets, as well as hotels.
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, and automated customer support.
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IPO Details
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Details
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Information
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IPO Date
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June 10, 2024 to June 12, 2024
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Face Value
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₹1 per share
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Price Band
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₹88 to ₹93 per share
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Lot Size
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161 Shares
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Total Issue Size
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79,580,900 shares (aggregating up to ₹740.10 Cr)
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Fresh Issue
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12,903,226 shares (aggregating up to ₹120.00 Cr)
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Offer for Sale
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66,677,674 shares of ₹1 (aggregating up to ₹620.10 Cr)
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Listing At
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BSE, NSE
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Ixigo’s Journey
Since its inception in 2007, Ixigo has become a favourite among Indian travellers. The app facilitates bookings for flights, trains, buses, and hotels, all in one place. With advanced features like AI-powered travel assistance and personalized recommendations, Ixigo continues to attract and retain users.
In FY23, Ixigo reported a net profit of ₹23.4 crore, a significant turnaround from a ₹21.09 crore loss the previous year. Revenue from operations increased by 32% to ₹501.3 crore. For the nine-month period ending December FY24, net profit grew by 252.1% to ₹65.7 crore, while revenue jumped 34.8% to ₹491 crore compared to the previous year. This strong performance underpins their decision to proceed with the IPO. Ixigo’s profitability, focus on railway ticketing, and targeting of Tier II and smaller markets are major strengths for its IPO.
Travel Industry Overview
The global travel technology market was valued at $9.4 billion in 2022 and is projected to reach $21 billion by 2032, growing at a CAGR of 8.6% from 2023 to 2032. This notable growth is driven by the increased use of voice search and voice control, the rise in contactless payment options, and the growing application of artificial intelligence.
Travel technology involves using technology for trip planning and automating travel booking processes, payments, itineraries, and back-office operations for travel agencies. It enables online bookings for customers, enhancing both bookings and revenue. This technology has significantly transformed the travel and tourism industry by allowing travel companies to target travellers more effectively and offer comprehensive travel services, such as hotels, flights, tours, transfers, and activities, all on a single online platform. This allows customers to plan their entire trip within minutes, greatly improving the visitor experience.
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Competition
Ixigo will inevitably face challenges in the unpredictable travel market, marked by intense competition. However, the company is well-prepared, leveraging cutting-edge technology to enhance services and maintain customer satisfaction. This positions them well for continued growth.
Ixigo's strategy of focusing on Tier II and smaller markets has been crucial in establishing a strong presence in the train booking segment, differentiating it from competitors like EaseMyTrip, Yatra, and MakeMyTrip, which primarily focus on flights and hotels. This unique approach has created a compelling narrative for investors. In its DRHP, Ixigo highlights Confirmtkt's lead in India's rail market, attributing it to their enhanced user experience features such as live train tracking, PNR prediction, station alarms, AR coach positions, and free cancellation.
The Road Ahead
Ixigo plans to use the net proceeds from its IPO to meet working capital requirements, enhance technology infrastructure, expand investments in data science and AI, and support inorganic growth through acquisitions. The company should continue to improve its technological capabilities and expand its market outreach in Tier II and beyond to achieve sustainable growth.
Examining its direct competitors' IPO performances, EaseMyTrip was listed during the IPO boom in 2021 with a premium of over 10% on the BSE and more than 13% on the NSE. Conversely, Yatra had a disappointing debut in 2023, listing at a 10% discount to its issue price.
Overall, the travel tech ecosystem is experiencing promising growth globally, expected to be further boosted by AI-led automation that makes travel bookings and related services more customized and convenient.
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