ixigo IPO oversubscribed on second day; here are 10 key things to know from RHP before subscribing to the issue

ixigo IPO: The initial public offering of Le Travenues Technology Ltd that operates travel booking platform has opened on Monday, June 10. The issue, with a price band of ₹88 to ₹93 per share, will close on Wednesday, June 12, and bids for anchor investors will be open for one day on Friday, June 7. ixigo IPO subscription status was 9.33 times on Tuesday, the second day of subscription.

The company stated that 75% of the issue size has been allocated for qualified institutional buyers (QIBs), 15% for non-institutional investors, and the remaining 10% for retail investors. Investors may bid for a minimum of 161 shares and multiples thereof.

The Gurugram-based ixigo IPO is a combination of a new issue of equity shares worth ₹120 crore and an Offer For Sale (OFS) of 6.66 crore equity shares worth ₹620 crore by existing shareholders at the top end of the price band. This equates to a public offering of ₹740 crore.

Also Read: Ixigo IPO: Price band set at ₹88-93 per share; check issue details here

The fresh issue's proceeds of ₹45 crore will be used to fund the company's working capital requirements, while ₹26 crore will be used for investments in technology and data science, such as cloud and server hosting, artificial intelligence and customer engagement. In addition, funds will be utilised to support inorganic expansion through acquisitions as well as general business objectives.

The book running lead managers for the ixigo IPO are Axis Capital Limited, Dam Capital Advisors Ltd (formerly Idfc Securities Ltd), and JM Financial Limited, with Link Intime India Private Ltd serving as the registrar.

ixigo IPO GMP today is ₹0, which meant shares were trading at their issue price of ₹93 with no premium or discount in the grey market according to investorgain.com

Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.

Also Read: Ixigo IPO: From launch date to size - here's all you need to know about the upcoming issue

ixigo IPO Shareholders

SAIF Partners India IV Ltd (up to 19,437,465 equity shares), Peak XV Partners Investments V (previously known as SCI Investments V) (up to 13,024,000 equity shares), Micromax Informatics Ltd (up to 5,486,893 equity shares), Placid Holdings (up to 3,048,375 equity shares), Catalyst Trusteeship Ltd (up to 1,333,513 equity shares), Madison India Capital HC (up to 447,428 equity shares), Aloke Bajpai (up to 11,950,000 equity shares), and Rajnish Kumar (up to 11,950,000 equity shares) would all sell shares through the OFS.

SAIF Partners and Peak XV are the company's major shareholders, holding 23.37% and 15.66%, respectively.

ixigo IPO Organisation Structure

The company consider their entrepreneurial culture and flat organisational structure as factors in their success, and in containing their operating expenses, while maintaining its growth.

Also Read: Ixigo's parent Le Travenues Technology refiles draft papers with SEBI to raise funds via IPO

ixigo IPO Services 

Over the course of the company's user lifecycle, it has been able to cross-sell and upsell tickets as well as Value-Added Services or services ancillary to their booking offerings, including ixigo Assured, ixigo Assured Flex, Abhi Assured, seat selection, in-flight meals, visa processing, travel insurance, and car rental services, in addition to providing free information and utility services.

ixigo IPO Peers

The company's listed peers are Easy Trip Planners Ltd (with a P/E of 54.96), and Yatra Online Ltd (with a P/E of 187.83).

 ixigo IPO Business

The firm is a digital startup that enables Indian travelers to plan, book, and manage their journeys via train, air, bus, and hotel. Our mission is to become the most customer-centric travel company by providing the finest possible customer experience to its users. The company's focus on travel utility and customer experience for travellers in the 'next billion user' market segment is driven by technology, cost-effectiveness, and an innovative culture. Their OTA platforms enable travellers to purchase train, flight, bus, and hotel tickets, as well as travel utility tools and services built using in-house proprietary algorithms and crowd-sourced data.

Also Read: Ixigo back in black, posts ₹8 cr Q1 profit

ixigo IPO Industry

According to the F&S Report, the entire Indian travel industry, which includes air, train, road, and hotel modes, is predicted to be about ₹3.8 trillion in fiscal 2023 and would expand at a compound annual growth rate (CAGR) of around 9% to reach ₹5.8 trillion by fiscal 2028. The Indian OTA sector raised its gross booking income from ₹749 billion in fiscal 2020 to ₹1,239 billion in Fiscal 2023, representing an 18% CAGR over the period. The COVID-19 pandemic slowed the sector's growth in fiscal 2021 and fiscal 2022, but the OTA business has recovered owing to pent-up demand.

The Indian OTA sector is anticipated to be worth ₹1,239 billion in fiscal 2023 and ₹2,802 billion in fiscal 2028, with an 18% CAGR.

ixigo IPO market demand

The company has a large presence in the 'next billion user' market. According to the F&S Report, the term 'next billion users' refers to an existing and anticipated market of "new to Internet" users that includes all non-tier I market demand, i.e., all travel demand originating from and/or concluding in tier II, III, and rural areas in India, as well as "new to Internet" users emerging from middle and lower income groups of tier 1 cities. Over the next five years, it is projected that 20% of the 'next billion users' would come from tier I cities, 50% from Tier II and tier III cities, and the remaining 30% from rural India.

ixigo IPO Key Risks
Some of the key risks are as follows;

• The offer price, market capitalisation to revenue multiple, and price to earnings ratio based on the company's offer price may not be indicative of the company's market price at the time of listing or later.
• The company's train ticketing services are based on their arrangement with IRCTC. The termination of their agreement with IRCTC might prevent us from providing train ticketing services and have a significant negative impact on their operating performance, cash flows, financial condition, and business prospects.

Ixigo IPO Financials 

The company's total income increased to ₹517 crore in the fiscal year ending March 2023, up from ₹385 crore the previous year. The company made a profit of ₹23.4 crore in the fiscal year ending March 2023, up from a loss of ₹21 crore in the previous year.

Lock-in of equity shares allotted to anchor investors

Anchor Investors will have 50% of their equity shares locked in for 90 days from the date of allotment, while the remaining shares will be locked in for 30 days.

Also Read: ixigo plans to raise ₹750 cr in primary share sale during IPO

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