IXIGO IPO Case Study: Business Model, Key Details, and Financials

IXIGO, also known as Le Travenues Technology Limited, is an online travel company that started in 2007. It is a one-stop shop for travelers, providing many services. It currently sits as a major player in the Indian online travel market, offering various travel planning and booking services. Recently, IXIGO came out with an IPO. 

In today’s blog post, we will learn more about the IXIGO IPO and understand its finances. 

IXIGO IPO Overview

Rajnish Kumar and Aloke Bajpai, alums of the Indian Institute of Technology Kanpur (IIT-K), founded the company in 2007. It uses artificial intelligence and data science to improve users’ travel experiences. IXIGO focuses on Indian travellers’ needs, offering features such as cancellation protection for domestic flights.  

Business Model of IXIGO

The company’s platform offers booking for train, flight, bus tickets, and hotels. It also provides travel tools and services developed using the company’s algorithms, including train PNR status and confirmation predictions, train seat availability alerts, train running status updates and delay predictions, alternate route or mode planning, flight status updates, automated web-check ins, instant fare alerts for flights, AI-based travel itinerary partner, and automated customer-based support services.

Some of IXIGO’s platforms are given below:

IXIGO Flights — This vertical was launched in 2007. The idea behind creating the website was to help travellers find the best flight deals and provide accurate travel information. They can then easily buy their tickets from third-party airlines and websites. The website also empowered travellers to conduct thorough research, compare prices effectively, and make informed bookings for their preferred flights at a cost-efficient rate.

IXIGO Trains — In 2013, the IXIGO Trains app was launched for Android to enhance the journey of Indian train travellers. This user-friendly app revolutionised train travel by enabling users to search for train-related information easily.

ConfirmTkt – It is another train-focused mobile app that predicts wait lists and helps with booking. It aims to ensure that users get a confirmed ticket.  

AbhiBus –  It sells bus tickets by partnering directly with operators or sourcing inventory from bus ticketing aggregators in the country to strengthen its foothold in the bus travel industry.

Hotels — In December 2023, the company launched a hotel booking section on its website and apps, allowing users to search, compare, and book hotels on platforms in India and worldwide. It offers properties in both domestic and international hotels, spanning budget, mid-range, and luxury price points. 

Did you know?

IXIGO’s market share in India in the OTA (Online Travel Industry) rail market was 46.15% in FY 2023 and increased from 46.4% in the first half of FY 2023 to 52.4% in the first half of FY 2024.

Revenue Structure of IXIGO

IXIGO sells train tickets as a B2C ticketing agent and has partnered with IRCTC since November 2017. The company generates the majority of revenue from train tickets users buy through the platform. This revenue is received via agent service fees and payment gateway charges.

In addition, IXIGO makes money from ads and by promoting other services like IXIGO Assured Flex, which allows users to cancel train tickets for a small fee and get a full refund before the chart is prepared.

IRCTC charges IXIGO a maintenance fee for each ticket sold, as well as charges for using the enquiry API and promotional activities like showing advertisements, offering cashback, cross-selling, and free cancellation.  

Furthermore, IXIGO’s revenue also comes from other bookings like the flight tickets. Flight tickets generate revenue via convenience fees, commission/net rates, rescheduling charges, cancellation charges, and incentives.

Revenue also comes from convenience fees, Abhi Assured fees, and commissions on bus ticket bookings that users book through our platforms.

Did you Know?

In July 2023, IXIGO became the first Online Travel Agency (OTA) in India to launch a generative AI-based travel planning tool.

IXIGO IPO Details

IPO Date	June 10, 2024 to June 12, 2024
Price Band	INR 88 to INR 93 per share
Lot Size	161 Shares
Total Issue Size	79,580,900 shares
Fresh Issue	12,903,226 shares
Offer for Sale	INR 66,677,674 shares
Issue Type	Book Built Issue IPO
IPO Type	Main-Board IPO
Basis of Allotment	Thursday, June 13, 2024
Initiation of Refunds	Friday, June 14, 2024
Listing Date	Tuesday, June 18, 2024

Objectives of the Issue

The company proposes to utilise the proceeds towards the following:

1. Partially funding working capital requirements of the company;
2. Investments in cloud infrastructure and technology; and
3. Funding inorganic growth through unidentified acquisitions, other strategic initiatives, and general corporate purposes.

Financial Statement Highlights

Balance Sheet

Key Metrics	FY 2023	FY 2022	FY 2021
Total non-current assets	336.64	305.55	114.62
Total current assets	249.26	232.91	70.45
Total equity	387.11	342.68	29.93
Total current liabilities	156.28	136.31	104.27
Total non-current liabilities	42.52	59.46	50.86

Income Statement

Key Metrics	FY 2023	FY 2022	FY 2021
Total income	517.57	384.94	138.40
Total expenses	484.29	402.54	135.69
Profit / (Loss) for the year	23.39	(21.09)	7.53

Cash Flow Statement

Key Metrics	FY 2023	FY 2022	FY 2021
Cash Flow from Operating activities	30.70	(34.34)	(15.18)
Cash Flow from Investing activities	22.01	(221.63)	(10.18)
Cash Flow from financing activities	(2.17)	257.88	13.53

KPIs

Key Ratios	FY 2023	FY 2022	FY 2021
Return on Net Worth %	5.74%	(7.15%)	24.13%
EBITDA Margin	8.70%	(1.81%)	4.44%

Read Also: What is the Book-Building Process in an IPO?

Key Insights

IXIGO reportedly showcased high revenue growth from FY 2021 to FY 2023, with a CAGR exceeding 90%, which indicates rapid business expansion.

A net profit of INR 23 crores in FY 2023 suggests effective cost management, demonstrating the company’s ability to sustain growth.

Risks Involved

1. IXIGO depends on partnerships with travel service providers, especially IRCTC, for train bookings. Changes in partnerships or commission structures can affect revenue.
2. The company has less experience in certain hotel segments compared to established OTAs. This may limit their growth potential in those areas.
3. Economic downturns, pandemics, and other external factors can affect the travel industry, severely impacting IXIGO’s bookings and revenue.
4. The online travel market is highly competitive, with strong companies like MakeMyTrip and ClearTrip. IXIGO has to keep innovating and standing out to maintain its market share.
5. Despite becoming profitable recently, the company has experienced losses in the past. The key to future profitability is effectively managing costs and sustained revenue growth.

Read Also: Mukka Protein IPO: Business Model, Key Details, Financial Statements, and SWOT Analysis

Conclusion

On a parting note, IXIGO has positioned itself as a leading player in Indian online travel, offering a user-friendly platform for travelers to easily search, compare, and book flights, trains, and hotels. Its unwavering focus on technology and meeting the specific needs of Indian travelers has been pivotal in driving its success.

Though the company has its merits, the issue does come with its set of risks. Therefore, it is important to analyse all points before investing in the company. 

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