Ixigo (Le Travenues Technology Ltd) IPO - 7 things to know
Ixigo (Le Travenues Technology Ltd), the digital travel aggregator and agnostic platform provider, had filed its draft red herring prospectus (DRHP) in August 2021 and SEBI had already given its observations and approved the IPO in December 2021. However, Ixigo (Le Travenues Technology Ltd) is yet to announce the dates of its IPO. The IPO will be a combination of a fresh issue and an offer for sale.
However, the short term IPO plans of the company have been constrained by the sharp correction in most of the digital stocks post IPO, with most of them losing close to 50-60% of their values from the peaks.
7 important things to know about the Ixigo (Le Travenues Technology Ltd) IPO
1) Ixigo (Le Travenues Technology Ltd) has filed for an IPO with SEBI which comprises of a fresh issue of Rs.750 crore. In addition, there will also be an offer for sale or OFS component in the issue to the tune of Rs.850 crore taking the total issue size to Rs.1,600 crore.
Ixigo is backed by marquee private equity names globally and includes Sequoia Capital, Elevation Capital, Government of Singapore (GIC), apart from Micromax. The company is into the business of aggregating buyers and sellers in the travel market place by providing them a content rich agnostic platform.
2) As stated earlier, the offer for sale (OFS) portion in the Ixigo (Le Travenues Technology Ltd) IPO with be worth Rs.850 crore. As part of the IPO, both Elevation Capital and Micromax will be looking to partially exit their stakes in Ixigo.
The company had bene promoted in 2007 as Bookings.com and both the promoters; Alok Bajpai and Rajnish Kumar are highly respected technocrats.
They will also look to partially monetize their stakes in Ixigo. The OFS component will not be EPS dilutive as it just results in change in ownership structure. However, it is useful as it improves the free float of the company and facilitates the listing and trading of the company, post the IPO.
3) The fresh issue portion of Rs.750 crore will be used by the company for its organic and inorganic growth initiatives. In the digital business, it is important to constantly advertise, remain top-of-mind for customers and keep investing in technology and innovations to keep the customers continuously interested.
Inorganic outlays will be in the of niche mergers and acquisitions where Ixigo sees value in taking over an existing company at a good price rather than reinventing the wheel. The fresh issue component will be capital dilutive and also EPS dilutive.
4) The company competes with other key players in this agnostic travel platform business like EasyTrip.com, Yatra.com, Makemytrip.com, Cleartrip.com and Booking.com. The only other travel portal to come out with a public issue was the Hyderabad based Easy Trip, which has done remarkably well since its listing on the stock exchanges.
Of course, the cautious sentiments in this sector will continue to be an overhang, being a highly contact intensive sector in the Indian context..
5) One of the recent inorganic purchases of Ixigo was the buyout of Hyderabad-based bus ticketing and aggregation platform AbhiBus. This is a platform to select the best bus service connecting two places and providing ticket booking facility on the platform. For Ixigo, this was more of a micro level natural extension to their core business model.
Earlier in Feb-21, Ixigo had also bought train booking app “Confirmtkt” to add to its existing offerings. The company has been in the process of beefing up its board by inducting new directors with unique skill sets to boost corporate governance practices along with growth of the business.
6) Ixigo (Le Travenues Technology Ltd) is the largest Indian OTA in the online train bookings segment and is one of the biggest distributors of IRCTC tickets. In fact, Ixigo had nearly 42% of the market share of B2C distribution of IRCTC products to customers.
Even their bus app is the second largest in India in terms of volume of bookings. In terms of air travel bookings, Ixigo is the third largest in India with a market share of 12% in online air bookings for the year ended FY21.
7) The IPO of Ixigo (Le Travenues Technology Ltd) will be lead managed by ICICI Securities, Axis Capital, Kotak Mahindra Capital and Nomura Financial Advisory. They will act as the book running lead managers or BRLMs to the issue. Law firms Shardul Amarchand Mangaldas and Khaitan & Co. will act as the legal advisors to the issue.
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