Ixigo IPO Review 2024 – GMP, Finance and More

Ixigo IPO Review 2024: Travel opens up new horizons by allowing us to explore different cultures, landscapes and experiences that broaden our perspectives. This IPO review details Ixigo, India’s leading online travel agency.

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

Ixigo IPO Review 2024 – Company Overview

Ixigo (Le Travenues Technology), founded in 2006, is an online travel agency (OTA) that allows travelers to book train, plane and bus tickets as well as hotels through the OTA platform under the brand name “ixigo”.

Ixigo offers a wide range of services including PNR status and confirmation predictions, train seat availability alerts, train operation status updates and delay predictions, alternative routes or transportation plans, flight status updates, automatic web check-in, bus operation status, pricing and availability. Alerts, deal discovery, destination content, personalized recommendations, instant flight fare alerts, AI-powered travel planning services, and automated customer support.

The various OTA platforms provided by ixigo are as follows:

1. ixigo train and checktkt app: This allows users to search for available train tickets across India, book and pay for tickets, get tickets through various fulfillment methods, access real-time information on train arrivals and departures, and avail the required after-sales support. Travel planning and booking becomes easy. .
2. ixigo-flights mobile app: It allows users to search and book flights, train tickets, buses, and hotels. Users can access past and future reservations, check and modify reservation details, and request e-tickets and details through the messaging platform.
3. Aviverse App: Through this app, users can check bus amenities, compare ticket prices, check the bus schedule for the desired route, and use other facilities.

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

Recently, the company launched ixigo PLAN, an AI-based intelligent travel planner. This tool helps travelers create detailed travel itineraries and access real-time destination information. The company also unveiled a generative AI plugin to facilitate conversational interactions with ixigo PLAN.

Ixigo also launched a new service called ixigo Assured Flex. This service allows customers to purchase flexible air or rail tickets at a low price, with no additional costs for cancellation or rebooking (excluding price differences) for all domestic flight and rail reservations.

Ixigo IPO Review 2024 – Industry Overview

According to the World Travel and Tourism Council (“WTTC”), India’s travel and tourism expenditure reached Rs 16.5 trillion in fiscal 2023, accounting for 9.7% of India’s GDP. This contribution is expected to experience strong growth in the coming years. This includes transport and accommodation costs, as well as expenditure on cultural activities, sport, recreation, entertainment, retail, food and beverage and visitor exports by both residents and visitors.

Currently, the Indian travel and tourism market across air, road, air and hotel sectors accounts for approximately Rs 3,808 trillion and is expected to grow at a compound annual growth rate (CAGR) of 9% to reach Rs 5,904 billion by FY 2028.

There has also been a surge in online bookings across all travel modes, driven primarily by the increased digitization of inventory due to the COVID-19 pandemic. The overall online travel industry is expected to grow by 13%. This growth will be primarily driven by 18% growth in the bus online segment and 15% growth in the aviation segment.

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

Ixigo IPO Review 2024 – Finance

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

Similarly, Ixigo’s revenue also increased from ₹7.53 crores in FY21 to ₹23.40 crores in FY23. However, the company incurred losses in FY22 due to rising costs.

For the nine months of FY24, the company’s revenue and net profit stood at ₹678.71 crore and ₹65.71 crores respectively, which is greater than the overall revenue of FY23.

Additionally, the company does not have long-term borrowings that would provide sufficient leverage to fund future debt.

Comparison with listed peers

Colleagues listed in the industry include Easy Trip Planner and Yatra Online. The following image presents the company’s key performance indicators along with their industry peers listed.

Company Strengths

• In FY 2023, Ixigo and ConfirmTkt held a 51% market share in rail bookings among online travel agencies (OTAs). Additionally, it accounted for 5.2% of the total OTA aviation market size in the first half of fiscal 2024. Additionally, Abhibus became the second largest OTA in India with a market share of 12.5% ​​in the first half of FY24.
• The company leverages artificial intelligence, data science, and machine learning to transform travel data and user-generated information into valuable business insights to enhance travel services and streamline operations.
• The company uses open source technology to lower the total cost of ownership of its infrastructure. Additionally, the Company uses optionally available software, allowing its spending on software and licensing costs to increase as its users and queries grow.
• The company has cost-effective online marketing channels consisting primarily of search engine optimization, app store optimization, and paid search engine marketing. The channel focuses on organically improving search engine rankings and has an app store with high-quality content to improve user ratings and reviews on OTA platforms. .
• The company offers a comprehensive product and service offering across train, flight, bus and hotel businesses and is able to monetize all aspects of its OTA platform by catering to India’s online travel market.

company’s weaknesses

• Train ticketing services depend on the contract between the company and IRCTC. Termination of this Agreement may result in the Company being unable to perform train ticket services, which could have a negative impact on its business.
• The company’s primary focus is to expand its customer base through sales and marketing activities. The costs incurred by the Company for this purpose have increased over time and the Company cannot guarantee that these costs will be proportional to the number of customers it is able to secure.
• The Company generates revenue primarily through commissions, incentives and other compensation received from travel suppliers. Any reduction or elimination of such compensation could have a negative impact on the Company’s business.
• The Company’s business depends on its relationships with a wide range of travel suppliers. Any negative changes in these relationships or our inability to form new relationships could have a negative impact on our business.
• The Company relies on third-party service providers for a significant portion of its operational services. If these suppliers fail to meet the company’s requirements, the company’s operations may be disrupted.

Ixigo IPO Review 2024 – GMP

Ixigo’s shares were trading at a premium of 32.26% in the gray market on June 6, 2024. The stock was lagging at Rs.123. This gives it a premium of Rs. This is the upper limit of Rs 93 plus 30 per share.

Ixigo IPO Review 2024 – Key IPO Information

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

Proposal registered by: Link Intime India Private Limited

promoter of the company

There are no identifiable promoters within the company. Details of the selling shareholder’s proposed sale are as follows:

purpose of the problem

Net proceeds generated from new issues issued by the Company will be utilized for the following purposes.

1. Financing the Company’s partial working capital requirements
2. Invest in cloud infrastructure and technology
3. We fund inorganic growth through private acquisitions and other strategic initiatives.
4. General corporate purposes.

conclusion

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

However, some risks include dependence on IRCTC for train ticket services, rising customer acquisition costs, dependence on travel suppliers for commissions, and potential disruption of third-party service providers.

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

What do you think the future holds for your company? Applying for an IPO? Let us know in the comments below.

Written by Aaron Barth

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