Ixigo IPO To Open Next Week: Indian OTA Aims to Raise $89 Million

Le Travenues Technology, the parent company of Indian travel aggregator Ixigo, will be launching its initial public offering (IPO) on June 10. The company announced on Wednesday that the INR 7.4 billion ($89 million)-IPO size, includes a fresh issuance of equity shares worth INR 1.2 billion ($14.4 million) (and an offer for sale of INR 6.2 billion ($74.4 million). The IPO price band ranges from INR 88 to 93 per share.

Ixigo had initially filed for an IPO to raise INR 16 billion ($192 million) in August 2021, and had received regulatory approval in December 2021.

Ixigo, which helps travelers plan, book, and manage trips across various modes of transportation and accommodation, filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in February and received approval in May.

The IPO, open for subscription till June 12, includes an offer-for-sale (OFS) of 66,677,674 equity shares by existing shareholders. Key stakeholders such as SAIF Partners (now, Elevation), Peak XV, Micromax Informatics, Placid Holdings, Catalyst Trusteeship, and Madison India Capital HC as well as co-founders Aloke Bajpai and Rajnish Kumar, are among those selling their shares.

SAIF Partners and Peak XV are the largest shareholders in Ixigo, holding 23.37% and 15.66% stakes, respectively.

How Will Ixigo Use IPO Money?

During Wednesday’s press conference the Ixigo management referred to the company as the country’s second largest online travel agency (OTA).

“We have the highest app usage among OTAs with 83 million monthly active users cumulatively across our apps, as per September 2023 data. We were also the fastest growing OTA in terms of app downloads, with 4.9 million monthly app downloads in September 2023,” the company said in its draft red herring prospectus.

As per the draft papers, Ixigo reported a net profit of INR 234 million ($2.9 million) for fiscal 2023, with a 32% increase in revenue from operations, reaching INR 5 billion ($60 million). For the nine-month period ending December fiscal 2024, the company’s net profit surged by 252% to INR 657 million ($7.9 million), while revenue increased by 35% to INR 4.9 billion ($59 million) year-on-year.

Based on the draft papers, the company proposes to utilize the net proceeds of the IPO in this manner:

• The company said it would allocate INR 450 million($5.4 million) to partially fund its working capital requirements, distributing INR 214 million ($2.5 million) in 2025 and INR 236 million ($2.8 million) in 2026.
• INR 258 million ($3.1 million) would be allocated towards investments in cloud infrastructure and technology: INR 120 million ($1.4 million) in 2025 and INR 138 million ($1.7 million) in 2026.
• Ixigo would also use the money to fund inorganic growth through unidentified acquisitions and other strategic initiatives and general corporate purposes.

“Our strategy focuses on expanding our user base, particularly targeting the ‘next billion user’’’ market segment. We emphasize customer acquisition through robust sales and marketing activities,” the company stated in the draft papers.

IPO Timing

In spite of receiving regulatory approval in December 2021, Ixigo decided to wait and watch. In an interview with Skift last year, CEO and Co-Founder Aloke Bajpai remarked on Ixigo’s prudent approach to timing the IPO, noting that the market’s recent rebound has created a favorable environment for their public debut.

“In hindsight, this cautious approach seems wise, as many tech companies that went public in the past year experienced a period of negative trading,” he said. “Only recently has the rebound started.”

Ixigo’s IPO follows the successful launch of travel tech company TBO Tek’s IPO last month, which saw great investor interest with an overall subscription rate exceeding 86 times. The trend indicates a growing positive sentiment towards travel companies in India, reflecting renewed investor confidence in the sector’s potential for growth.