The initial public offering (IPO) of Le Travenues Technology continued to see a strong response from the investors during the second day of the bidding process. After being fully subscribed on the first day itself, the issue continued to attract investors from retail and HNI categories.
The Gurugram-based Ixigo is selling its shares in the price band of Rs 88-93 apiece. Investors can apply for a minimum of 161 shares and its multiples thereafter. It is looking to raise Rs 740.10 crore via IPO, which includes a fresh share sale of Rs 120 crore and an offer-for-sale (OFS) of 6,66,77,674 equity shares.
According to the data, the investors made bids for 24,02,24,075 equity shares, or 5.49 times, compared to the 4,37,69,494 equity shares offered for the subscription by 1.15 pm on Tuesday, June 11. The three-day bidding for the issue will conclude on Wednesday, June 12.
The allocation for retail investors was subscribed 13.86 times, while the portion reserved for non-institutional investors saw a subscription of 10.10 times. However, the quota set aside for qualified institutional bidders (QIBs) quota was booked only 39 per cent times as of the time.
Founded in 2006, Le Travenues Technology is an online travel agency (OTA) that enables travelers to book train, flight, and bus tickets as well as hotels under the brand name 'Ixigo'. The company has the highest app usage among OTAs with a cumulative 83 million monthly active users across its apps.
The grey market premium of Ixigo has remained formed after the first day of the bidding. Last heard, the company was commanding a premium of Rs 25-26 in the unofficial market, suggesting a listing pop of about 28 per cent for the investors. However, the premium in the grey market stood around Rs 21-23 levels a day earlier.
Brokerage firms are mostly positive on the issue suggesting investors to subscribe to it on the back of industry tailwinds, brand recall and business scalability, resulting in expansion of profitability. However, some analysts are skeptical over rich valuations and dependence on a broad range of travel suppliers.
Ixigo achieved a remarkable CAGR of 92.29 per cent in revenue from operations between FY21 and FY23, driven by increasing GTV. Looking forward, its diversified offerings across trains, flights, buses, and hotels position it well to capitalize over the expanding Indian online travel market which is projected to grow to Rs 2,802 billion by FY28, at a CAGR of 18 per cent, said SMIFS.
"Continued investment in AI and technology is expected to enhance operational efficiency and user experience, contributing to higher margins and profitability. The company's focus on organic growth and expanding its value-added services portfolio will likely drive future revenue growth and user engagement," it added with a 'subscribe' rating for the issue.
Ixigo mobilised Rs 333 crore from anchor investors by allocating more than 3.58 crore equity shares to 23 investors at Rs 93 apiece. It reported a net profit of Rs 65.81 crore with a revenue of Rs 497.10 crore for the nine months ended on December 31, 2023. The company's bottomline came in at Rs 23.40 crore with a revenue of Rs 517.57 crore for the financial year 2022-23.
Le Travenues recently unveiled ixigo PLAN, an AI-powered travel planner that provides users with detailed itineraries and real-time destination information. It also introduced a generative AI plugin enabling conversational interactions. The company is solidifying its position as India's fastest-growing OTA, it has a history of negative cash flows from operations, said SMC Global.
This trend may continue in the future, which could be a concern for some investors. However, long-term investors might find LTTL's growth potential attractive, considering their ability to tolerate the risk associated with negative cash flow, it added while giving it a two-star rating out of five.
Le Travenues Tech has reserved 75 per cent of the net offer for the qualified institutional bidders, while non-institutional investors will get 15 per cent of the allocation in the IPO. Remaining 10 per cent of the net offer shall be reserved for the retail investors.
DAM Capital Advisors (formerly IDFC Securities), Axis Capital and JM Financial are the book running lead managers of the Ixigo IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with Tuesday, June 18 as the tentative date of listing.