Le Travenues Technology (ixigo) is a technology company empowering Indian travelers to plan, book and manage their trips across rail, air, buses, and hotels. The company assists travelers in making smarter travel decisions by leveraging artificial intelligence, machine learning, and data science-led innovations on its online travel agency (OTA) platforms, comprising websites and mobile applications. The OTA platforms allow travelers to book train tickets, flight tickets, bus tickets, and hotels.

ixigo is the OTA for the ‘next billion users’, with its focus on localized content. The apps aim at solving problems of Tier II and III travelers. As of 31 December 2023, there were 213.21 million registered users, i.e., users who had provided their unique mobile number or email address, as applicable, on the ixigo platforms as of the relevant date. As of March 31, 2024, the company had 429.38 million annual active users. ixigo has the highest app usage among OTAs, with 83 million monthly active users cumulatively across its apps. In September 2023, ixigo recorded 4.9 million monthly app downloads, as per data.ai. This was more monthly app downloads than all other OTAs in that month.

In September 2023, ixigo flights, ixigo trains, ConfirmTkt, and AbhiBus collectively saw the highest usage and engagement among all key OTA players. Standalone transactional train mobile apps in India had the highest monthly active users and sessions. It is the largest Indian train ticket distributor in the OTA rail market, with a share of around 51% in terms of rail bookings among OTAs as of 31 March 2023. Its market share in the OTA rail market in India was 46.15% in FY2023 and increased from 46.4% in H1 of FY 2023 to 52.4% in H1 of FY2024. Bus-focused app AbhiBus was the second largest bus-ticketing OTA in India, with a 11.5% share in online bus ticket bookings in FY2023. The share increased to 12.5% in H1 of FY2024. The share by volume was nearly 5.2% of the total India airline OTA market in H1 of FY2024, up from 3.3% in FY2023.

As many as 49.07 million transactions were booked through the OTA platforms in FY2023. As many as 42 million transactions were booked through the OTA platforms in the nine months ended December 31, 2023.

Object of the offer

The IPO consists of a fresh issue of Rs 120 crore and 6,66,77,674 equity shares through OFS.

Out of the proceeds from the fresh issue, Rs 45.0 crore will be used to fund the working capital requirements, Rs 25.8 crore towards investment in cloud infrastructure and technology, and the balance to fund inorganic growth through unidentified acquisitions and other strategic initiatives and for general corporate purpose.

Strengths

Leading OTA for the ‘next billion users’ with the highest monthly active users (MAU) for mobile apps across all key OTAs as of September 2023.

The fastest growing OTA in India by revenue from operations between FY2020 and FY2023. The number of transactions booked through the OTA platforms increased at a CAGR of 139.43% from 8.56 million in FY 2021 to 49.07 million in FY2023, and to 42 million and36.47 million in the nine months ended December 2023 and December 31, 2022, respectively.

Technology forms the basis for operating leverage and achieving significant efficiencies in business processes and operations. Uses artificial intelligence, data science and machine learning to transform travel information and crowd-sourced data into business intelligence to enhance travel offerings.

Established consumer travel brands with user-first approach. The apps were one of the highest rated apps among OTAs, with a rating of 4.6 on the Google Play Store as of November 2023. The apps had the highest usage and engagement among all key OTA players. Brand presence and loyalty among users is evident from the monthly active users increasing from 21.59 million in March 2021 to 44.20 million in March 2022, 62.83 million in March 2023 and 77.04 million in December 2023. The repeat transaction rate was 86.06% and 85.14% in the nine months ended December 2023 and in FY2023, respectively.

The business model consists of a comprehensive mix of product and service offerings with presence across trains, flights, buses and hotels businesses to comprehensively addresses the online travel market in India and monetize all aspects of the OTA platforms.

Led by an experienced leadership team with significant industry experience. Chairman and Managing Director Aloke Bajpai holds a B Tech in electrical engineering from IIT, Kanpur, and an MBA from INSEAD. Director and Group Co-Chief Executive Officer Rajnish Kumar holds a BTech degree in Computer Science and Engineering from IIT, Kanpur. They have worked with Amadeus SAS in France and possess over 22 years of experience in travel technology.

Weaknesses

Commenced operations as a meta search website and subsequently transitioned to become an OTA. As such has limited experience of operating as an OTA.

The train ticketing services depend on the agreement with IRCTC. Termination of the agreement could end the train ticketing services and have a material adverse effect on the business.

The arrangement with IRCTC is on a non-exclusive basis. IRCTC may engage with other distribution partners, including competitors.

Any failure to maintain satisfactory performance of the technology infrastructure, including the OTA platforms, could lead to disruptions in the services and materially affect business operations.

Incurred net losses in the past and anticipates increased expenses in the future. Any loss going ahead could adversely affect the operations and financial condition.

Subject to privacy regulations. Compliance with these regulations could impose a significant compliance burden.

Launched products and features such as ixigo Assured, ixigo Assured Flex and Abhi Assured to improve customer experiences. Intends to continue offering new features and products. The business could be hit if the roll-out of new products and services, features, improvements and strategies does not meet the objectives or customer expectations.

Failure to maintain and enhance brands ixigo, ConfirmTkt, and AbhiBus or the quality of customer service could lead to difficulty in maintaining existing and acquiring new users and business partners.

The Indian tours and travel industry is highly fragmented, with many small un-organized tour operators as well as established players, resulting in intense competition within the tourism space.

The covid-19 pandemic, or any future pandemic or widespread public health emergency, could affect the financial condition.

Negative cash flow from operation stood at Rs 34.4 crore in FY 2022 and Rs 15.2 crore in FY2021.

The business depends on its relationships with a broad range of travel suppliers. Any adverse changes in these relationships or inability to enter new relationships could affect the business.

Valuation

In the nine months ended December 2023, consolidated sales were up 34.78% to Rs 491.02 crore. The OPM increased 152 bps to Rs 28.24 crore. OI decreased 57.84% to 6.08 crore. Interest cost was up296.36% to Rs 2.39 crore. Also, depreciationrose34.02% to 10.31 crore. PBT before exceptional items declined by 12.77% to Rs 18.78 crore. Net profit surged 289.81% to Rs 66.80 crore as against net profit of Rs 17.14 crore.

In FY 2023, consolidated sales were up 32.1% to Rs 501.25 crore. OP turned positive to Rs 28.72 crore as against an operating loss of Rs 12.32 crore. OI increased by 204.5% to 16.32 crore. Interest cost jumped 66.1% to Rs 6.53 crore. Depreciation was higher by 37.9% to Rs 10.82 crore. PBT before exceptional items stood at Rs 33.28 crore as against loss of Rs 17.6 crore. Provision for tax was credit of Rs 2.72 crore as against expense of Rs 3.49 crore. Net profit stood at Rs 21.64 crore as against a net loss of Rs 24.38 crore.

At the higher price band of Rs 93, the offer is made at around 100 times P/ TTM EPS, 5.6 times EV/ TTM sales, and 84 times EV/TTM Ebitda.

The listed industry peers are Easy Trip Planners and Yatra Online. Easy Trip Planners offers a comprehensive range of travel-related products and services under the flagship brand Ease My Trip. Yatra Online provides information, pricing, availability, and booking facilities for domestic and international customers.

In comparison Easy Trip Planners trades at 70 times its P/ TTM EPS, 11.9 times EV/TTM sales and 33.6 times EV/TTM Ebitda. Yatra Online is trading at 347.2 times its P/TTM EPS, 4 times EV/TTM sales and 112.3 times EV/ TTM Ebitda.