Online travel aggregator (OTA) Le Travenues Technology, the parent company of ixigo, has announced a price band of INR 88-93 per equity share for its upcoming initial public offering (IPO), scheduled to open for bids next Monday, June 10.
Fundraising Target and Structure
At the upper end of the price band, the Delhi NCR-based startup aims to raise approximately INR 740 Cr through its IPO. The offering comprises a fresh issue of shares worth INR 120 Cr and an offer for sale (OFS) component of 6.67 Cr shares.
Under the OFS, ixigo’s cofounders Rajnish Kumar and Aloke Bajpai will sell 1.19 Cr shares each, while investors SAIF Partners India and Peak XV Partners plan to offload 1.94 Cr and 1.3 Cr shares, respectively. Additionally, other investors such as Micromax Informatics, Placid Holdings, and Madison India will also divest portions of their stakes as part of the IPO.
Journey and Market Dynamics
Founded in 2007 by Bajpai and Kumar, ixigo initially operated as a travel search website before transitioning into an OTA in FY20. The platform facilitates the sale of various travel services, including flights, trains, bus tickets, hotel bookings, and holiday packages.
While ixigo had originally aimed to raise INR 1,600 Cr during India’s bullish IPO market in 2021, the company has adjusted its IPO size amid market uncertainties, a trend observed across many startups during market downturns.
Differentiation and Market Reception
Despite market challenges, ixigo’s unique positioning, particularly its focus on railway ticketing and smaller markets, sets it apart in the competitive OTA landscape. This strategic emphasis on addressing the travel needs of Tier II and smaller cities strengthens its value proposition, a factor likely to resonate positively with investors.
During a pre-IPO conference, ixigo’s CEO Bajpai emphasized the company’s distinctive approach, highlighting its commitment to solving travel challenges in underserved markets. He underscored ixigo’s status as a compelling “Bharat story” amidst a crowded OTA market, emphasizing its unique perspective and user-centric focus.
Financial Performance and Confidence
Despite current market volatility, ixigo remains confident in its IPO prospects, buoyed by robust financial performance. The company reported a consolidated net profit of INR 65.7 Cr in the first nine months of FY24, representing a threefold increase from the previous fiscal year. Similarly, operating revenue surged to INR 491 Cr during the same period, underscoring ixigo’s growth trajectory and market resilience.
Conclusion: Navigating Market Dynamics
ixigo’s IPO underscores its resilience and strategic positioning in the OTA segment. As the company navigates market uncertainties, its differentiated approach, coupled with strong financial performance, positions it favorably for investor interest. Despite prevailing challenges, ixigo’s IPO represents an opportunity to capitalize on emerging market opportunities and drive sustained growth in the dynamic travel sector.
