The initial public offering (IPO) of Le Travenues Technology Ltd, which operates the travel booking platform Ixigo, opened for subscription on Monday, June 10. The issue will conclude on June 12. Ixigo is a technology company focused on allowing Indian travelers to plan, book and manage their trips across rail, air, buses and hotels.
Ixigo is the largest Indian train ticket distributor in the Online Travel Agency (OTA) rail market and they had the largest market share of around 51 per cent, in terms of rail bookings, among OTAs, as of March 31, 2023.
Ahead of the IPO opening, the company’s shares are trading with a premium of Rs 23 in the unlisted market.
The grey market is an unofficial ecosystem where shares start trading before the allotment in the IPO and continue till the listing day. Most investors track the GMP to get an idea of the listing price.
This compares with the issue pricing of Rs 88-93 per share with a minimum bid quantity of 161 shares, which translates to a listing gain of nearly 25 per cent if the current trends sustain.
Ixigo IPO Details
Ixigo’s IPO allotment is expected to be finalized on June 13 and the IPO listing date is June 18.
The IPO lot size is 161 shares and the minimum investment amount required by retail investors is Rs 14,973.
At the upper end of the price band, ixigo IPO size amounts to Rs 740.10 crore which is a combination of a fresh issue of 1.29 crore equity shares aggregating to Rs 120 crore and an offer for sale (OFS) component of 6.67 crore shares aggregating to Rs 620.10 crore.
Le Travenues Technology Ltd already raised Rs 333 crore from anchor investors last week before its IPO opening.
Axis Capital, Dam Capital Advisors Ltd, and JM Financial are the book-running lead managers of the ixigo IPO, while Link Intime India Private Ltd is the IPO registrar.
The company proposes to utilize the net issue proceeds towards part-funding working capital requirements, investments in cloud infrastructure and technology, and funding inorganic growth through unidentified acquisitions and other strategic initiatives and general corporate purposes.
Ixigo IPO GMP Today
Ixigo IPO GMP today, or grey market premium today, is Rs 23 per share, as per stock market observers. This indicates that the equity shares of Ixigo are trading higher by Rs 23 at Rs 116 apiece in the grey market, a premium of 24.73 per cent to the issue price of Rs 93 per share.
Should you subscribe to the Ixigo IPO?
Most analysts have recommended subscribing to the Ixigo IPO on the back of its leadership in market share in the online travel segment, industry tailwinds and future growth prospects. Here’s what brokerages have to say about the Ixigo IPO.
“At an upper band, the company is valued at P/E of 154x while on market-cap/sales it is valued at 7.2x post issue of equity shares, compared to its peers (Yatra Online – 192x, Easy trip planners – 54.5x) 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,” said domestic brokerage firm Anand Rathi.
Thus, it recommends a “Subscribe – long term” rating to the Ixigo IPO.
Considering the financial performance, the company’s Revenue, EBITDA and PAT grew at a CAGR of 92.3%, 194.9%, and 76.2% during the FY21-23 period.
“On the upper price band, the issue is valued at a P/E of 163.2x based on FY23 earnings. Though the valuations are rich, we believe that the nature of the platform business (high pass-through of revenues) 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,” BP Equities said.
Canara Bank Securities also recommended subscribing to Ixigo IPO for long-term investment because of its leadership in market share in the online travel segment and the major shift of trends of offline booking to online booking and adding new routes across to increase connectivity.
While Link Intime India is the registrar, Axis Capital, DAM Capital Advisors, and JM Financial are the book-running lead managers to the public issue.
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