ixigo in ‘wait and watch mode’ for Rs 1,600-crore IPO

Aloke Bajpai, Group CEO & co-founder of ixigo, told FE in an interaction that the travel aggregator’s IPO approval from markets regulator Sebi is valid until December 2022.

Bajpai added during the interview that the company is ‘sufficiently well capitalized’ and has enough runway to support operations for the foreseeable future without a requirement to raise additional funding anytime soon.
Bajpai added during the interview that the company is ‘sufficiently well capitalized’ and has enough runway to support operations for the foreseeable future without a requirement to raise additional funding anytime soon.

Online travel aggregator ixigo, which received a regulatory nod for its proposed Rs 1,600-crore IPO in December last year, is still in a ‘wait and watch mode’ for its public market debut even as the start-up reported a 184% y-o-y increase in revenue from operations for the financial year ended March 2022.

Aloke Bajpai, Group CEO & co-founder of ixigo, told FE in an interaction that the travel aggregator’s IPO approval from markets regulator Sebi is valid until December 2022.

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“We are currently working on the timing of the IPO, which depends on how conducive the (travel) market is in the next few months. We have been advised by our bankers to kind of wait for the right time and as and when we are advised to go ahead , that’s when we will proceed. So it will be difficult to guide on any timeline immediately,” said Bajpai.

According to the firm’s DRHP, the issue comprises a fresh issue of equity shares worth Rs 750 crore and an offer for sale (OFS) of up to Rs 850 crore. The OFS consist of sales of up to Rs 50 crore each by Bajpai and Rajnish Kumar, Rs 550 crore by Saif Partners India IV and Rs 200 crore by Micromax Informatics. Currently, Bajpai holds 9.18%, Rajnish Kumar 8.79%, SAIF Partners 23.97% and Micromax 7.61% stake in the firm.

Bajpai added during the interview that the company is ‘sufficiently well capitalized’ and has enough runway to support operations for the foreseeable future without a requirement to raise additional funding anytime soon.

“We have not been kind of making any cash losses as such in a material way at least in the last three years. For the moment, we are sufficiently well capitalised. For us, any fresh funding will primarily be used for expansion and looking for new acquisition and investment opportunities,” added Bajpai.

In FY22, ixigo reported Rs 451.51 crore in revenue from operations, which is up by 184% y-o-y compared to Rs 158.84 crore in the previous financial year. The firm reported a net loss of Rs 21.09 crore in FY22, although it reported a profit of Rs 7.53 crore in the previous year. ixigo’s Ebitda loss for FY22 was at Rs 6.95 crore as compared to a positive Ebitda of Rs 6.14 crore in the previous year.

The company said that a good chunk of its future revenue is expected to come from smaller towns and cities which are increasingly turning to online travel and ticketing platforms to buy both bus and train tickets. In FY19, FY20 and FY21, the percentage of transactions booked through ixigo’s OTA (online travel aggregator) platforms, where either an origin or destination was a non-tier-I city were 83.89%, 87.48% and 92.60%, respectively.

“Users in tier-II, III, IV markets have been more resilient while showcasing higher demand after the travel segment bounced post the second wave. Most of their bookings were made across either trains and buses which are now running in almost full capacities, especially those running to smaller tier towns,” said Bajpai.

The start-up had made two acquisitions recently, including cash and stock acquisition of bus ticketing platform Abhibus in August 2021, and train ticketing platform Confirmtkt in February 2021. As of March 2022, ixigo claimed to have touched 5 million daily active users cumulatively across ixigo trains, ixigo flights, Confirmtkt, and AbhiBus apps and websites.

It also crossed 8.47 million monthly downloads and 55.45 million monthly active users in the month of March 2022.
This summer, the hospitality industry’s affordable luxury 4-5 star hotels and resorts have seen growth in demand of up to 2x of pre-pandemic, but budget hotels have not seen that kind of momentum coming back, according to Bajpai. He added that FY23 will likely witness growth for the industry as corporate and SME travellers have come back into the system.

However, the recent airfare hike due to rising oil prices has driven customers towards trains and buses, which have shown phenomenal growth during the last two years.

“Indian aviation has seen a 40% rise in domestic airfares and 70-80% rise in international fares on some routes this summer. Many airlines are not even operating their fleets to their full strength. India’s airline market bounced back in Q1 FY23 but our data analysis shows that the number of air travellers was still around a 3.65 lakh per day level – less than the pre-pandemic figure of around 4.1 lakh,” said Bajpai.

Launched in 2007 by Bajpai, Ixigo is focused on empowering travellers to plan, book and manage their travels by leveraging artificial intelligence, machine learning and data science-led innovations. It is currently the second biggest OTA in India by operating revenues in FY22 with MakeMytrip being the market leader.

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