Le Travenues Technology Ltd, better known by its brand name ixigo, has launched its initial public offering (IPO) for subscription today, June 10. Ixigo is a leading technology company in India that helps travelers plan, book, and manage their trips across various modes of transport, including rail, air, buses, and hotels. Notably, ixigo holds the largest market share in the Online Travel Agency (OTA) rail market, accounting for approximately 51% of rail bookings as of March 31, 2023.
The bidding period for the Ixigo IPO spans from June 10 to June 12. The allotment of shares is expected to be finalized on June 13, with the IPO listing scheduled for June 18. The price band for the IPO is set between ₹88 to ₹93 per share, with a lot size of 161 shares. This means the minimum investment required by retail investors is ₹14,973. At the upper end of the price band, the total size of the IPO amounts to ₹740.10 crore, comprising a fresh issue of 1.29 crore equity shares aggregating to ₹120 crore, and an offer for sale (OFS) of 6.67 crore shares aggregating to ₹620.10 crore.
Prior to the IPO opening, Le Travenues Technology Ltd successfully raised ₹333 crore from anchor investors last week. The lead managers for the IPO are Axis Capital, Dam Capital Advisors Ltd, and JM Financial, with Link Intime India Private Ltd serving as the IPO registrar. The proceeds from the IPO are intended to fund various needs, including working capital requirements, investments in cloud infrastructure and technology, potential acquisitions, strategic initiatives, and general corporate purposes.
The grey market premium (GMP) for the Ixigo IPO is currently ₹23 per share, indicating that the shares are trading at ₹116 apiece in the grey market, a premium of 24.73% over the issue price of ₹93 per share.
Analysts and brokerages generally recommend subscribing to the Ixigo IPO, citing the company’s market leadership in the online travel segment, favorable industry trends, and strong future growth prospects. For instance, domestic brokerage firm Anand Rathi values the company at a P/E of 154x and a market-cap/sales ratio of 7.2x post-issue. They believe Ixigo has significant potential for business improvement and scalability, driven by industry tailwinds and strong brand recall, and thus recommend a “Subscribe – long term” rating.
The company’s financial performance has been impressive, with revenue, EBITDA, and PAT growing at a compound annual growth rate (CAGR) of 92.3%, 194.9%, and 76.2% respectively during the FY21-23 period. BP Equities also notes that despite the high valuations, the large industry opportunity and the nature of the platform business should drive sustained earnings growth, leading them to recommend a “Subscribe” rating.
Similarly, Canara Bank Securities suggests a long-term investment in the Ixigo IPO, emphasizing its market leadership in the online travel sector and the significant shift from offline to online bookings, which is expected to expand connectivity and boost growth.
In summary, the Ixigo IPO offers an intriguing investment opportunity, with strong endorsements from various financial analysts and a promising outlook for future growth in the online travel industry.
