The initial public offering (IPO) of Le Travenues Technology, the parent company of Ixigo, opens for bidding today, that is, on Monday, June 10. The travel-tech firm is offering its shares in the range of Rs 88-93 apiece, when investors can apply for a minimum of 161 equity shares and its multiples thereafter. The issue closes for bidding on Wednesday, June 12.
Le Travenues Technology, which was founded in 2006, 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 Rs 740.10 crore IPO of Ixigo includes a fresh share sale of Rs 120 crore and an offer-for-sale (OFS) of up to 6,66,77,674 shares by its existing shareholders amounting to Rs 620.10 crore including SAIF Partners India IV, Peak XV Partners Investments V, Aloke Bajpai, Rajnish Kumar, Micromax Informatics, Placid Holdings, Madison India Capital and Capital Trusteeship.
The net proceeds from the issue shall be utilized towards part-funding working capital requirements of the company; investments in cloud infrastructure and technology; funding inorganic growth through unidentified acquisitions and other strategic initiatives; and general corporate purposes.
Ixigo mobilised Rs 333 crore from anchor investors by allocating more than 3.58 crore equity shares to 23 investors at Rs 93 apiece. The anchor investor includes Government of Singapore, Morgan Stanley, WhiteOak Capital, Bay Capital India Find, Tata Investment Corporation, Bajaj Allianz Life Insurance Company, SBI Mutual Fund and HDFC Mutual Fund and more.
Its list of services includes 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 service and automated customer support.
Ixigo 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 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.
Axis Capital, DAM Capital Advisors (formerly IDFC Securities) 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. Here's what a host of brokerage firm say about the IPO of Le Travenues Technologies:
Anand Rathi Research Rating: Subscribe Ixigo is an OTA platform which is focused on empowering Indian travellers to plan, book and manage their trips across rail, air, buses and hotels. It is the second largest OTA in India in terms of consolidated revenue from operations in FY23. Its vision is to become the most customer-centric travel company, by offering the best customer experience to users, said Anand Rathi Research.
"The company is valued at P/E of 154 times while on market-cap/sales it is valued at 7.2 times post issue of equity shares, compared to its peers on FY23 earning basis. Therefore, we believe that Ixigo has a scope of business improvement on the back of industry tailwinds, brand recall and business scalability, resulting in expansion of profitability," it added with 'subscribe' rating.
Canara Bank Securities Rating: Subscribe Ixigo exhibits a strong financial position, as evidenced by its robust net worth and steady revenue streams, instilling confidence in investors regarding its ability to weather market fluctuations and deliver long-term value. This issue is available at P/E of 160 times as of March 2023, which appears expensive as compared to peers, said Canara Bank Securities.
"Ixigo showcases robust financial performance and a trajectory of sustained growth.We recommend 'subscribe' for long term investment because of its leadership in market share in online travel segment and major shift of trends of offline booking to online booking and adding new routes across so as to increase connectivity," it added.
Swastika Investmart Rating: Subscribe Ixigo operates in the rapidly growing Indian online travel market. Its established brand presence, AIpowered operations, and diversified business model position the company for continued growth. While Le Travenues has demonstrated strong post-pandemic recovery with impressive top-line and bottom-line growth, some key risks require careful consideration, said Swastika.
"The company faces high customer acquisition costs and operates in a highly competitive industry. Additionally, its dependence on a broad range of travel suppliers introduces potential risks. Considering the long-term growth potential of the online travel sector and the company's established brands," added Swastika Investmart with a 'subscribe for long term' rating for the IPO.
StoxBox Rating: Subscribe Ixigo's revenue, Ebitda, and PAT grew at a CAGR of 92.3 per cent, 194.9 per cent and 76.2 per cent during the FY 2021-23 period, considering the financial performance, said StoxBox. The issue is valued at a P/E of 163.2 times based on FY2023 earnings on the upper price band, he said.
"Though the valuations are rich, we believe that the nature of the platform business and large industry opportunity size would be the key factors to drive sustained and high earnings growth in future. We, therefore, recommend a 'subscribe' rating for the issue," it added.
SBICap Securities Rating: Subscribe The company is valued at annualized FY24 P/E multiple of 100.1 times based on the upper price band on the post-issue capital. Ixigo is the leading OTA for the ‘next billion users’ with the highest monthly active users for mobile apps across all key OTAs as of September 2023, said SBICap Securities.
"The company recorded a strong revenue CAGR of 350 per cent between FY20-FY23 and revenue per employee for FY23 stood at 9.2 million. We recommend the issue for long-term investment horizon," the brokerage firm added.
Master Capital Services Rating: Subscribe Ixigo is an online travel agency (OTA) that is focused to build a superior customer experience by using AI to differentiate in this market. They will use the fresh proceeds to fund its working capital and make new acquisitions. They have done 3 acquisitions in the last 3 years and integrated the companies with their platform, said Master Capital Services.
"The company has been capturing market share since 2020 and wants to continue on this trajectory. The IPO is priced at a premium to its listed peers, given the industry tailwinds and a long growth runway, we advise to subscribe to the IPO for listing gains," it added.
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