ixigo IPO: Subscription Opens Today; GMP Hints Premium Listing; Price Band Set Below Rs 95/Share

Le Travenues Technology Ltd, better known by its brand name ixigo, opens its Initial Public Offering (IPO) for subscription today, June 10, marking a milestone for the Indian online travel booking industry. As the largest train ticket distributor in India, ixigo is poised to capture investor attention with its robust market presence and promising growth prospects.

The ixigo IPO bidding window is open from June 10 to June 12, with the allotment date set for June 13 and the listing date scheduled for June 18. The price band for the IPO is set at Rs 88 to Rs 93 per share. Investors can buy in lots of 161 shares, with a minimum investment of Rs 14,973.

At the upper end of the price band, the total IPO size is Rs 740.10 crore. This comprises a fresh issue of 1.29 crore equity shares worth Rs 120 crore and an offer for sale (OFS) of 6.67 crore shares, aggregating Rs 620.10 crore. Key stakeholders like SAIF Partners India IV Ltd, Peak XV Partners Investments V, Micromax Informatics Ltd, Placid Holdings, Catalyst Trusteeship Ltd, Madison India Capital HC, Aloke Bajpai, and Rajnish Kumar will offload their stakes through the OFS.

The net proceeds from the fresh issue will be allocated towards several strategic initiatives. Approximately Rs 45 crore will fund the company's working capital requirements. Around Rs 26 crore will be invested in enhancing technology and data science capabilities, focusing on cloud infrastructure, artificial intelligence, and customer engagement. The remaining funds will support inorganic growth through acquisitions and other strategic initiatives, as well as general corporate purposes.

Ixigo stands out in the Indian online travel agency (OTA) market, particularly in rail bookings where it holds a commanding 51% market share as of March 31, 2023. The company's platforms facilitate travel planning, booking, and management across multiple modes of transportation, including rail, air, buses, and hotels. Leveraging advanced technologies like artificial intelligence and machine learning, ixigo aims to offer a seamless and intelligent travel experience.

Financially, ixigo has shown a turnaround. The company reported a net profit of Rs 23 crore for the year ending March 2023, an improvement from a loss of Rs 22 crore in the previous year. Revenue during this period increased by 32% to Rs 501 crore. For the nine-month period ending December FY24, net profit surged by 252% to nearly Rs 66 crore, up from Rs 18.7 crore in the same period of the previous fiscal year, while revenue grew 35% to Rs 491 crore.

As of today, ixigo's IPO GMP stands at Rs 23 per share, indicating a grey market price of Rs 116 per share. This represents a 24.73% premium over the issue price of Rs 93, suggesting strong investor confidence and potential listing gains of nearly 25% if current trends hold.

The grey market, an informal trading platform where shares trade before official allotment and listing, often serves as a barometer of market sentiment. The positive GMP for ixigo indicates robust demand and an optimistic outlook among investors.

Ahead of the IPO, ixigo successfully raised about Rs 333 crore from anchor investors. Notable participants include Nomura, Morgan Stanley, Government of Singapore, 3P India Equity Fund, HDFC MF, Motilal Oswal MF, and Tata Investment Corp. This anchor investment reflects the strong institutional interest and confidence in ixigo's business model and growth prospects.

The IPO allocation is structured with 75% reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors, and the remaining 10% for retail investors. This allocation ensures a balanced investor base and broad market participation.

Most market analysts have given a positive outlook on the ixigo IPO, citing its leadership position in the online travel segment, favourable industry trends, and robust future growth prospects. The company's use of technology to enhance user experience and operational efficiency is seen as a key driver of its competitive advantage.

Ixigo's focus on leveraging technology to improve travel planning and booking positions it well to capitalize on the growing digital adoption in the travel industry. The company's ability to integrate artificial intelligence and data science into its operations is expected to enhance its service offerings and customer satisfaction.

The capital raised from the IPO will enable ixigo to bolster its technological infrastructure, support expansion initiatives, and pursue strategic acquisitions. This will likely enhance its market position and drive long-term growth.

The ixigo IPO presents an opportunity for investors looking to tap into the rising online travel market in India. With a solid market position, strong financial performance, and strategic growth initiatives, ixigo is well-positioned for future success. As the bidding window opens, investors are watching, anticipating significant gains and long-term returns from this tech-driven travel company.