Ixigo IPO: Ixigo Plans a 750 Crore IPO

Ixigo travel made headlines with its supposed plans to go public and is allegedly arranging to file its draft herring prospectus with SEBI sometime next month – in July.

Here’s are some important things to note with regards to this upcoming IPO:

Who is Ixigo?

Ixigo is a Gurugram-based travel bookings portal, launched in 2007. Its business focuses on train, bus and flight bookings. Like many of its peers, it also throws in deal discovery, user-specific unique recommendations, air-fare predictions, notifications about train delays and other such add-ons to its core service offering.

Its competitors are the likes of Yatra, EaseMyTrip and other online booking websites.

What do numbers look like?

Newspapers have quoted anonymous insiders who have given out fairly exciting figures linked to Ixigo’s business. One website said that a company insider quoted “an annualized gross booking value run rate of Rs 5,000 crore. [Ixigo] has bounced back to nearly 2x of pre-Covid levels.”

Additionally, one of the company’s founders has published the following on a social media website:

• The company enjoyed a net revenue of Rs 153 crores (35 percent YoY growth) and an EBITDA loss of Rs 5.4 crore (87 percent profitability improvement).
• In a Covid-19 ravaged year when the entire segment felt the heat, Ixigo’s FY21 revenues are higher than FY20

Public figures suggest that the online travel company has over 35 million users in India and in other pa

What has Ixigo been up to in recent months?

There has been a flurry of activities in Ixigo’s proverbial corridors during the last few months. The run-up of developments is certainly conducive to an upcoming IPO. Let’s have a look.

• New management

The company’s new CFO (Chief Financial Officer) is Ravi Shanker Gupta, who has an excellent track record in hand-holding companies as they go public, including the Dominos Pizza mother company Jubilant FoodWorks Ltd

• Raising capital

The company is in the process of raising capital and has currently already raised about Rs 22 million from its primary fundraising efforts.

• Acquisition

In the previous quarter, Ixigo acquired online train bookings company Confirmtkt which was based in Bengaluru and is currently getting a little under 40 million train bookings ever since the takeover, according to sources.

Is the tourism industry dead? Is now a good time to invest?

Lockdowns have certainly crippled the movement of people within cities and more so between cities, across states and between countries. The domestic tourism industry bounced back only briefly for a few months before the second wave of the pandemic brought renewed lockdowns across the country.

However, logically, once the pandemic is behind us one can expect that the online mode of everything that people have become accustomed to will carry on. Online train, flight and bus bookings were already far more preferred than the offline channel even before the pandemic struck.

As we publish this, second-wave linked lockdowns are being lifted. As far as the tourism industry goes – whenever people are able to – they will indeed travel and holiday. In fact, it is likely that lockdowns push people to travel even more as soon as they are allowed to in order to sort of make up for having been cooped up.

Big names linked to Ixigo and the upcoming Ixigo IPO

Ixigo is backed by:

1)   Sequoia Capital – a US-headquartered venture capital firm and

2)   Elevation Capital which recently rebranded from SAIF Partners and made news for raising USD 400 million for a new fund. It has backed brands such as Swiggy, MakemyTrip, Paytm, JustDial

3)   Makemytrip, a travel industry giant.

Ixigo has also reportedly made its selection of investment bankers in preparation for the IPO, namely

• Kotak Mahindra Capital,
• ICICI Securities
• Axis Capital
• Nomura

What do investors not know yet that they need necessarily know:

Ixigo only plans to submit its Red Herring Prospectus in July this year, which means investors are at least a month away from getting hold of all the key details that come with it. These include

1. What does Ixigo plan to do with the proceeds?

A Red Herring Prospectus puts on record the company’s plans for the investor capital. Many investors have a clear preference for companies that put out IPOs for the purpose of expansion. However, the opposite is true for companies that intend to use IPO proceeds to settle their debt. A lot of investors feel like if a company needs help to settle its debts, then perhaps there is something lacking in its business model.

2. What are Ixigo’s financials like?

Investors definitely want to know the profits and losses, assets and liabilities, revenue and market share of the companies that they intend to invest in. As such investors would want to see these details pertaining to Ixigo as well.

In addition, investors might want to look at Ixigo’s financials over the past five years.

3. Team

Ixigo has brought onboard a new CFO who has some amount of IPO fame, but what about the rest of the team and their track record? It is important for investors to ensure that the rest of the team is also able to manage their capital – additionally investors usually like to ensure that there are no bad apples in the mix.

4. Legal

Investors should always check the Red Herring Prospectus for any pending legal cases or legal trouble that the company might have landed itself in as this can seriously eat into investor capital when push comes to shove.

To sum up, the Ixigo IPO is still shrouded in a lot of secrecy but nonetheless seems to be eliciting tremendous excitement. Investors are advised to wait for further information – and to go through that information without bias when it is released – before attaching any sentiment to the IPO.

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FAQs

What are the open and close dates of the Ixigo IPO?

The Ixigo IPO dates are yet to be finalised at this point of time.

Who are the promoters of Ixigo?

Sequoia Capital India

Fosun RZ Capital

Micromax Informatics Limited

Elevation Capital

MakeMyTrip Limited

(read more about them in the main body of the blog)

What is the amount of the Ixigo Ltd IPO?

1500 to 1800 crore

What is the minimum lot size that I need to go for?

This is yet to be announced.

What is the Ixigo IPO price or the Ixigo IPO share pri543ce?

Ixigo is yet to file its Draft Herring Prospectus and as such here is no information about his at the moment

Is there a retail portion for the Ixigo IPO?

This is yet to be announced.  

Should I invest in the Ixigo IPO?

This depends on your investor profile and how it matches with Ixigo’s plans. You should ideally study the Draft Herring Prospectus before making such a decision