IPO Le-travenues

Introduction

Finally and more notably, having the popular and famous brand ixigo, Le Travenues Technology Ltd opened its IPO in June 2024. Currently set for IPO, this is a landmark moment for the company – to seek to mobilize a lot of capital and likewise provide investors with shares in the rapidly growing business of selling holidays and breaks online in the country. Here in this comprehensive report, we will take a closer look at the Policy on IPO and assess whether it will be financially suitable for introduction into the market insights into the financial background of the IPO, as well as the strengths, weaknesses, opportunities, threats, and any possible risks and returns that the IPO may offer to investors.

Overview of the IPO

The ixigo IPO is opening on 10th June 2024 and the issue will be closed on 12th June 2024 the company is looking to aggregate ₹740. 10 crore. Out of this amount, the company has introduced a new ₹120 crore issue and the offer for sale at ₹620 crore. 10 crore. The range of IPO has been finalised and they will be priced between ₹88 to ₹93 per share. Its shares are likely to begin trading in stock markets, including Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), from June 18, 2024.

Allocation and Subscription

The IPO allocation is designed to cater to various investor categories:

•   Qualified Institutional Buyers (QIBs): A minimum of 75% of the offer is reserved for QIBs and then opened to other investors.
•  Non-Institutional Investors (NIIs): NIIs are subsidized as much as 15% of the offer.
• Retail Individual Investors (RIIs): The first 72 hours are reserved for the members, while up to 10% can be offered to the Retail Investors.

While the Qualifying Bids can be placed for as low as 161 lots, the minimum amount has been set at ₹14,973 for the retail investors. The IPO also contains an anchor portion and its amount is given as ₹333. 05 crore from anchor investors before the opening of the main subscription. The company said it may raise Rs 475 crore from anchor investors before the opening of the main subscription.

Company Background

The company was founded in 2006 as the Le Travenues Technology Ltd and its primary service comes in the form of travel service which is encompassed under the trademark ixigo. To wit, the service involves buying tickets for traveling by train, plane, and bus, and making reservations for hotels. Its platforms are among the best for anyone to operate regardless of their technological literacy Frontend features cover aspects such as PNR status updates, fare alerts, and even AI travel planning.

Market Position and Usage

Further, Ixigo maintained a good market share in 2023 with 83 million monthly active users using the apps establishing it as one of the dominant OTAs in India. OTA rail refers to the online travel agent using the internet through which people book railway tickets, and the company has a stronghold of this segment; it controls about 51% OTA rail market as of the period ending March 31, 2023.

Financial Performance

However, the analysis of the company’s financial environment, namely the financial performance of Le Travenues Technology Ltd has indicated the existence of a significant improvement in its financial position over the last few years. The company’s revenue rose from ₹384 to ₹633, with net profit rising from ₹48 to ₹128 and gross profit from ₹295 to ₹466. 94 crore from FY2022 to ₹517 crore while the number of patients tested for Covid rose from 2495 to 9499 through the same year-to-year period. Precise is estimated to register a growth and record Rs. 57 crore in the next financial year that is FY2023. Besides, the company earned as much as ₹23 as profit. In FY2023, it was ₹40 crore which was considerable progress from the ₹21 crore loss in FY2022. 09 crore in FY2022. The positive trend in the figure above indicates increased efficiency in the company’s operations and the expansion of its market access.

Detailed Financial Analysis

Revenue and Profit Trends

It can be seen from the annual report that Le Travenues Technology Ltd has been experiencing good revenue growth revealing more and more consumers accessing the site and higher convenience for generating revenues. From the period of March 2021 to December 2023, the company experienced remarkable growth in terms of its revenue which is at ₹138. 41 crore to ₹497. 10 crore. This growth should be attributed to several factors, which include; an increase in the size of the market, successful marketing and promotional strategies, and partnerships.

In the context of revenue, though the topline saw very high growth, the PAT experienced a phenomenal turnaround from a loss of ₹21. 09 crore in FY2022 from a loss of ₹18 crore in the previous year which reflects the company’s improving financial health. 40 crore in FY2023. This improvement can be attributed to the management’s strength in the coercion of costs and their realization of improving operational parameters.

Asset and Liability Management

The asset of the company was ₹ 185. The figure has increased to ₹ indicating an increase in total assets. 07 crore in March 2021 to ₹678cr in February 2022 passing through 11 states in between. by December 2023 at around 70 crore. These include costs associated with the development of technology, continuous improvements of the company’s infrastructure as well as the expansion of the company into various markets. A positive change has also been depicted from the balance sheet to the growth of net worth was increased from ₹342. The operating expenditure increased from ₹69 crore in the current financial year 2022 to ₹437. 13 crore in FY2023.

Investment Rationale

Growth Potential

 The role that the company has created for itself in the market currently thanks to its satisfactory market position, continuing to challenge itself, coming up with new products that capture the customers’ attention, and last but not least, gaging the end users, putting it in a vantage position that would enable it to grow as it continues to adapt to the market forces and trends of the world. In addition, the rise of internet and smartphone usage has been gradually expanding in India so more customers will shift to the online travel service, which will have positive effects on Ixigo.

Strategic Initiatives

Some of Ixigo’s future growth plans include – Feature enhancements that improve traveler experience ‘Smart’ services and products, Ixigo’s AI for travel planning, and value-added services like ixigo Assured Flex. These programs not only set ixigo apart from rivals but also add value to its product revenue mix, which should support higher financial returns.

First of all, it is necessary to define financial strength and its relation to the organization’s growth perspectives.

Financially, analyzing its financial position, which reveals its performance and potential for development, ixigo is stable and developing. Its revenue growth from ₹384 cr during the pre-COVID period to around ₹337 cr during the current COVID period is clear evidence of the above-said point of view. 94 crore in FY2022 to ₹517 crore in FY 2022, which is a significant increase to be able to serve the masses. The increase in the Level 1 revenue of ₹57 crore in FY2023 signifies its growing market horizon and good monetization strategies. Discontinuation of loss-making plant/ segment gradually has been come down from ₹ 21. For FY2019 the company had reported a net loss of ₹09 crore however in FY2022 it had posted a profit of ₹23. The acquisition of the new SBI Express Credit Card worth thirty-odd lakh rupees indicates its better operations and cost control measures in the FY 2023 of Rs. 40 crore.

Competitive Analysis

Although Ixigo has expanded its service offerings beyond just OTAs, its primary OTA competitors are MakeMyTrip, Cleartrip, and Yatra. These are actual competitors of the company and each of them possesses dominance in the market and which provides similar services. However, it can be said that they stand a good chance against the rival focused on train bookings and the technological solutions implemented by ixigo. Thus, by building contextual technological superiority and deepening its service portfolio, ixigo is capable of sustaining competitive supremacy.

Valuation Metrics

Using the upper price band of ₹93 per share, the market capitalization of the IPO-based firm, ixigo is calculated to be around ₹3602. 85 crore. In terms of valuation, the P/E ratio is 160. 34 x, which is still higher than the industry average P/E of 121. 39x. Such a high P/E ratio shows that investors have high expectations regarding the company’s growth and its strong position in the OTA landscape.

Strategic Roadmap

Expansion Plans

The company’s future development is expected to focus on the diversification of services and regions of activity. For the company to achieve this kind of growth, the firm is likely to expand to new travel segments and invest in more technological capabilities. Much investment in artificial intelligence, machine learning, and data analytics solutions is going to remain central to improving usability and productivity.

Sustainability and CSR Initiatives

There are also some issues that Ixigo has encompassed; sustainability and corporate social responsibility (CSR). Reducing dependency on personal cars and supporting community projects are strategies to offer travelers sustainable products and services.

Investor Considerations

This growth appeal, combined with the inherent risks that exist with any company, makes ixigo’s IPO an interesting opportunity for potential investors. The market position of the company, its ability to provide innovative solutions, and the vision of its further development are some of the main strengths that can be seen while investing in it. However, one should also look at the related risks such as risk resulting from its dependency on key partnerships and operating in a highly competitive environment.

This is evident in the organization’s spectacular financial growth, especially the consistent increase in revenues and its improvement into becoming a profitable organization that can offer high returns on investment. Further, the persistent technological advancement and the systematic approach toward customers show that the company has a great prospect for growth.

Conclusion

The proposed IPO of Le Travenues Technology Ltd more famously known as ixigo coupled with the gradual opening up of the Indian online travel market may prove to be quite appealing for investors. This company specifically has a rather robust market position, a wide array of technological products, and clear strategic plans which can be considered a good basis for developing further. But before they invest, they need to make sure whether they will be risking their investments and whether the market will be suitable for an investment.

It is observable that Ixigo has strong financial metrics, perfect strategies to enter and expand into new markets and services, and dedication to its ongoing advocacy of sustainability and customer satisfaction. Hence, as a social actor that adapts and diversifies, the company also signifies the potential for earning high returns for its shareholders as well as the potential to contribute towards the development of the online travel sector in India.

People who aim to invest in a company providing an opportunity to enter the growing Indian travel market should consider investing in the IPO of the software company – ixigo. The main factors influencing ixigo favorably include the discussions of the market fundamentals, focus on product differentiation by offering new value-added services, and consensus on the existence of a clear long-term vision and plan well-established in the market.