Ixigo IPO Starts June 10: 10 Key Details from the Red-Herring Prospectus

Ixigo is launching its IPO on June 10. Here’s a simple breakdown of what you need to know.

Allocation of Shares:

• Qualified Institutional Buyers (QIBs): 75% of the shares.
• Non-Institutional Investors: 15% of the shares.
• Retail Investors: 10% of the shares.

Investment Details:

• Minimum Bid: Investors can start with a minimum of 161 shares.
• IPO Size: The IPO includes a fresh issue of equity shares worth ₹120 crore and an Offer for Sale (OFS) of ₹620 crore, making a total of ₹740 crore.

Use of Funds:

• Working Capital: ₹45 crore will go towards the company’s daily operational needs.
• Technology & Data Science: ₹26 crore will be used for tech improvements like AI and cloud hosting.
• Acquisitions & General Purposes: The rest will be for buying other companies and general business needs.

Key Managers:

• Lead Managers: Axis Capital, Dam Capital Advisors, and JM Financial.
• Registrar: Link Intime India.

Grey Market Premium (GMP):

• Current GMP: The shares are trading at the issue price of ₹93, with no premium or discount.

Major Shareholders Selling in OFS:

• SAIF Partners: 19.44 million shares.
• Peak XV Partners: 13.02 million shares.
• Micromax Informatics: 5.49 million shares.
• Others: Including the company’s founders, Aloke Bajpai and Rajnish Kumar, selling 11.95 million shares each.

Company Structure:

• Ixigo values a flat organizational structure and entrepreneurial culture to keep operating costs low and maintain growth.

Services Offered:

• Ixigo provides a range of travel-related services including ticket booking for trains, flights, buses, and hotels. They also offer value-added services like seat selection, travel insurance, and car rentals.

Market Position:

• Competitors: Easy Trip Planners (P/E of 54.96) and Yatra Online (P/E of 187.83).
• Business Focus: Ixigo aims to cater to ‘next billion users’ from smaller towns and rural areas, offering travel services powered by technology.

Industry Outlook:

• Growth: The Indian travel market is expected to grow from ₹3.8 trillion in 2023 to ₹5.8 trillion by 2028. The online travel agency (OTA) market is also set to grow significantly, recovering from a slowdown during the pandemic.

Risks:

• Pricing and Market Performance: The share price might not reflect the company’s actual market value immediately or in the future.
• Dependency on IRCTC: Ixigo’s train ticketing services depend on its agreement with IRCTC, which, if terminated, could negatively impact the company.

Financials:

• Revenue: Ixigo’s income grew to ₹517 crore in the year ending March 2023, up from ₹385 crore the previous year.
• Profit: The company reported a profit of ₹23.4 crore, improving from a loss of ₹21 crore the previous year.

Anchor Investors:

• Lock-In Period: Anchor investors’ shares will be locked for 90 days for 50% of their shares and 30 days for the rest after allocation.

Keep these key points in mind as Ixigo gears up for its public offering on June 10.