Ixigo Receives SEBI Approval for IPO: A Promising Milestone
Major travel tech company Ixigo is operating through Le Travenues Technology Ltd, has been granted the green light by the Securities and Exchange Board of India (SEBI) for its IPO. This important milestone came after Ixigo was issued an observer letter from SEBI in May 14 which allowed the company to move forward with its plans to launch an IPO.
Ixigo: Company Background
Based in Gurugram, Ixigo was founded in 2007 by Aloke Baijpai along with Rajnish Kumar as a travel search site. IThe company runs two sets of apps that cater to hotels and flights, and is implementing an “house of brands” approach by acquiring platforms such as ConfirmTkt along with Abhibus.
How Ixigo Works?
Ixigo functions as a full travel platform that combines a range of services to improve your travel experience. The way it works is:
- Friendly User Interface business provides a smooth and easy user interface that makes it simple for customers to use and find what they require quickly.
- Integrated Services: This platform combines many services into one application which includes flight, train and bus ticket bookings hotel reservations, and holiday packages.
- Special Features
- Reservations for Train: Customers are able to reserve train tickets as well as check PNR status. There is also the additional advantage of scheduling interstate ride sharing through BlaBlaCar when options for trains are not available or when waiting for a waitlist.
- Hotels and Flight Bookings: The app allows users to easily search for and book hotels and flights.
- Discounts and Special Offers Discounts and Offers: The business provides access to the most relevant apps as well as discounts on e-commerce, hyperlocal services, travel online, along food delivery.
- Achieving Targeted Outreach: It makes use of the brand’s name to create a context for customers and provide customized services and special offers.
- Reviews and Ratings: The company has an outstanding 4.6-star score on the Google Play Store, reflecting its trustworthiness and satisfaction of users.
By integrating these functions into one app, Ixigo simplifies the travel booking and planning process and provides a comprehensive solution for travellers.
Ixigo- Founder and Team
Aloke Bajpai
Aloke Bajpai is the Group CEO, Managing Director, and Co-Founder of Ixigo. He has a BTech with a major in Electrical Engineering from IIT Kanpur, an MBA in General Management from INSEAD as well as the MBA Exchange degree from The Wharton School.
He started out working as a software engineer for Amadeus SAS. There, he was elevated to Network Engineer and Senior Systems Engineer. He was later the Vice President of Final Quadrant Solutions before launching Ixigo in 2007. As well as his work as a Director at Ixigo, he also serves as director of Freshbus as well as Confirmtkt.
Rajnish Kumar
Rajnish Kumar is the Group CPTO and Co-Founder of Ixigo. A graduate from IIT Kanpur, he graduated from the Computer Science & Engineering department. He interned at ETH Zurich during his studies, focusing on Data Modelling/Warehousing and Database Administration.
He also began his professional career with Amadeus SAS, as a software engineer. He was elevated to the position of the position of Senior Software Engineer as well as Technical Lead. He was then the Director of Development for Isango! prior to co-founding Travenues that is now referred to as Ixigo in the year 2006.
Ixigo: Unique Value Proposition
Ixigo’s focus on the tier II as well as smaller market segments, especially in the booking of trains, offers a distinct value offer. In contrast to major competitors like EaseMyTrip, Yatra, and MakeMyTrip, Ixigo has capitalised on the market for train bookings. The revenue from train tickets was a major contributor to its total ticketing revenues in FY23.
The money will be used to:
- Working Capital Requirements: Rs 45 Cr
- Technology and Data Science Investments: Rs 26 Cr
- Technology Investments: In particular, cloud infrastructure, data science servers hosting, artificial intelligence, and improving customer engagement.
- Axis Capital, JM Financial JM Financial, JM Financial, and DAM Capital Advisors are the main book runners for the issue.
Background and Market Context
Initial Plans and Market Shift
There was a dramatic increase in travel for revenge as the consequences of this pandemic started to diminish and India’s buoyant IPO market enticed people. The company initially sought to launch a Rs. 1,600 crore public offering in August 2021. However, the startup abruptly abandoned it IPO plans. The decision was a good one due to the subsequent poor performance of high-value IPOs such as Paytm and Nykaa, in addition to the market sagging to 2022 in companies such as Zomato, PB Fintech, and Nykaa have highlighted the need to be cautious about market entry.
Refiling for IPO
In February 2024, with the market showing more resiliency, Ixigo refiled its DRHP to SEBI to get an R120 crore public listing. With SEBI’s approval, Ixigo is preparing to be a part of the IPO season, which is in full swing.
Ixigo: Strategic Strengths
Analysts point out several positives for Ixigo’s IPO:
- Performance: The Company’s performance in recent years has increased confidence in investors.
- Railway Ticketing Focus: Ixigo’s specialisation in train ticketing distinguishes it from other travel companies.
- Focusing on the Tier II and smaller Markets, this strategy will allow Ixigo to access a rapidly developing, untapped market.
Ixigo: Financial Performance
Ixigo’s financial trajectory has been promising:
- FY23: Consolidated net profit of ₹ 23.4 Cr, up from a net loss of ₹ 21.1 Cr in FY22.
- Operating Revenue: Increased 32% YoY to ₹ 501.2 Cr in FY23.
- Nine Months Ending FY24: Net profit of ₹ 65.7 Cr on an operating revenue of ₹ 491 Cr.
Revenue Model
Ixigo makes revenue from different resources; some of the prominent ones are:
- Reservation Fees: By charging customers for the reservation of different transport services, such as bus, train, and airline tickets, Ixigo makes money.
- Revenue from Rail Tickets: Ixigo offers consumers a convenient platform for making rail travel reservations, with a substantial percentage of its revenue coming from fees associated with reserving train tickets.
- Revenue from Airline Tickets: By charging customers a fee to buy airline tickets, the platform meets the varied travel demands of its user base and generates revenue.
- Revenue from Advertising: Through partnerships with advertisers, Ixigo expands its revenue stream by showcasing bargains and pertinent material to its user base.
Acquisitions
Ixigo has acquired 3 companies to date.
Here are the details:
| DATE | COMPANY NAME |
|---|---|
| August 5, 2021 | AbhiBus |
| February 4, 2021 | Confirmtkt |
| January 11, 2017 | Reach App |
Competitive Landscape and Challenges
While Ixigo’s competitive advantage in railway ticketing is a strength, its heavy reliance on IRCTC, which is both a partner and a competitor, poses a risk. The company’s non-exclusive agreement with IRCTC is valid until April 30, 2028, and any changes to this agreement could impact Ixigo’s business.
Market Sentiment and Outlook
The market’s cautious stance post-Paytm’s IPO has led Ixigo to revise its listing appetite, focusing more on profitability and sustainable growth. The travel tech sector is witnessing promising growth, with global market estimates reaching $21 Bn by 2032. Recent successful IPOs, such as Travel Boutique Online’s debut at a 55% premium, indicate strong investor interest.
Ixigo: Comparative Analysis of Competitors’ IPOs
| Company | IPO Year | IPO Size (INR Cr) | Listing Performance |
|---|---|---|---|
| EaseMyTrip | 2021 | 510 | Listed at 10%+ premium |
| Yatra | 2023 | 600 | Listed at 10% discount |
| Travel Boutique Online | 2024 | 600 | Listed at 55% premium |
| Ixigo (Planned) | 2024 | 120+ (Fresh Issue) | SEBI approved |
Conclusion
Ixigo’s approval from SEBI to launch its IPO marks a pivotal moment in its growth trajectory. With a robust financial performance, strategic focus on profitable and underserved market segments, and a clear plan for utilizing IPO proceeds, ixigo is well-positioned to make a significant impact in the public market. As the company gears up for this major step, it stands as a promising example of innovation and resilience in the Indian travel tech industry. Investors and industry watchers alike will be keenly following ixigo’s journey in the coming months.
Read our other blogs
GET IN TOUCH WITH US
For any query/ personal assistance feel free to reach out at support@Altiusinvestech.com or call us at +91-8240614850.
For Direct Trading, Contact Us.