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Exploring ixigo: Travel Tech from Overview to Valuation ahead of its IPO
This article elaborates on almost all aspects of the company ixigo which is one major player in the major player in travel and tourism industry things like the financials of the company and IPO-related information are covered in this article If you are planning to buy the IPO of ixigo this article is must read
A few years ago, when there was no internet boom in India, people used to stand in long lines for hours to book railway tickets. Alternatively, they had to go to nearby cyber cafes, which charged a commission, to book tickets. The business of travel ticket booking was quite different back then. However, ixigo has almost completely revolutionized this scenario. You might also think that even the official website of IRCTC, used for booking railway tickets, would often face technical glitches leading to server downtime. However, ixigo has transformed this situation significantly by partnering with IRCTC and making ticket booking much easier with its user interface. This was a major improvement as the frequent technical issues on the IRCTC website were a significant problem. Ixigo has done an excellent job of understanding consumer issues and working towards solving them effectively.
Although this is not just for booking train tickets, you can use it for almost all travel-related tasks. This includes booking flights, and hotels, and accessing the best travel information from around 100+ travel websites to provide users with the most reliable travel data.
Aloke Bajpai
Co-Founder & CEO at Ixigo
Angel Investor in 19 companies
Managing Director at Ixigo
Dharmendra Yashovardhan
ex-Co-Founder at Ixigo and 1 other company
Angel Investor in 3 companies
On the board of 2 other companies
Rajnish Kumar
Co-Founder at Ixigo
Angel Investor in 10 companies
Director at Ixigo and also on the board of 4 other companies
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The foremost priority for any information technology startup should be to deliver an excellent user experience. This ensures that any user visiting your app or website does not encounter server issues or other technical glitches. The reason for this emphasis is that a company, by deteriorating its customer experience, risks losing customers. By focusing on creating a positive user experience, a company can not only retain its existing customer base but also attract new users. Offering a seamless user experience makes customers more willing to pay commission charges, thereby contributing to the company's profitability.
No company would want its users to face difficulties with the website's front end or back end while planning their travel, as this could negatively impact their travel experience. Hence, ixigo has addressed this issue by designing an easy-to-use interface that is not only significantly different but also sleek and responsive. This approach ensures that users have a smooth and enjoyable experience, thereby solving the problem and enhancing overall customer satisfaction.
Ixigo, headquartered in Gurgaon, Haryana, India, is a prominent player in the travel sector. Founded in 2007 by Aloke Bajpai and Rajnish Kumar, it operates under the parent organization Le Travenues Technology Pvt. Ltd. The company's website, ixigo.com, serves as a comprehensive platform for various travel-related services.
Ixigo generally functions as an intermediary between the client and the official website, charging a commission fee for its services. It provides an unbiased comparison of different websites for a particular service. Typically, it operates on a meta-search model where users visit one website to find various options for a specific service, allowing them to save some money. In this model, users explore multiple website options for a service before making a booking, enabling Ixigo to successfully save people money and earn substantial commission in the process.
Recently, a cab company named "Bla Bla" entered into a partnership with Ixigo, offering intercity travel services through its cabs. This collaboration has the potential to benefit Ixigo through an additional revenue stream.
The business recorded revenue of Rs. 500 crore for the fiscal year 2023, and by 2024, it expects to have generated Rs. 700 crore.
Particulars |
FY19 |
FY20 |
FY21 |
FY22 |
YOY % FY22 |
CAGR % FY22 |
|
Net Sales |
109.1 |
111.6 |
135.6 |
379.6 |
179.9 |
51.5 |
|
Total Income |
114.1 |
113 |
138.4 |
384.9 |
178.1 |
50 |
|
Net Profit |
-40.4 |
-26.6 |
7.5 |
-21.1 |
-381.3 |
-19.5 |
|
Shareholder Funds |
13.7 |
-225 |
29.9 |
342.7 |
1046.2 |
192.5 |
|
Total Assets |
53.4 |
70.1 |
185.1 |
538.5 |
190.9 |
116 |
|
EPS |
-936.88 |
-617.03 |
174.67 |
-0.57 |
-100.3 |
According to the most recent data, the business will have over 7% EBITDA margin in 2023 and a two-fold increase in the gross transaction value run rate. Investors anticipate that Ixigo will have a prosperous future and are optimistic about the company's future expansion.
Segments of ixigo
Ixigo works in several travel-related markets. Among the important areas that Ixigo concentrates on are:
Booking of flights: Ixigo offers a platform for price comparison and the ability to search and book both domestic and international flights.
Hotel Reservations: With a variety of choices to suit all tastes and budgets, the website helps customers find and reserve lodging.
Train Reservations: Ixigo makes it easier for customers to plan and reserve their train trips by facilitating the booking of train tickets.
Bus Reservations: Ixigo is a complete transportation platform that allows users to make reservations for buses as well as other forms of transportation.
Cab Services: Ixigo has branched out into the provision of seamless end-to-end travel experiences by enabling customers to book taxis for interstate travel.
Travel Information: Ixigo is a meta-search engine that compiles data from many travel websites to give consumers a thorough and objective comparison of hotels, airlines, and other travel-related services.
Travel Bundles: Ixigo may provide bundles or travel packages that include lodging, airfare, and more services to provide a comprehensive vacation experience.
Travel planning: is made easier using Ixigo's mobile application, which caters to consumers who prefer to use their cell phones to access its services.
BHAI
April 1, 2023, was the first day that the travel app introduced BHAI, a cutting-edge headgear driven by artificial intelligence. Marketed as an artificial intelligence-powered Bluetooth trailblazer, the maker claims that this cutting-edge headset has been painstakingly crafted to improve travel for discriminating consumers.
Industry Research
India's vast expanse, spanning 3,287,263 square kilometres, encompasses the majestic snow-clad peaks of the Himalayas to the lush tropical rainforests in the southern regions. This diverse landscape, coupled with a rich cultural and historical heritage, presents an extraordinary tapestry of ecological variations and scenic wonders throughout the country. Exploiting this wealth, the tourism sector has emerged as a pivotal player in India's economic landscape. In 2021, it made a formidable contribution of US$ 178 billion to the nation's GDP, marking it as one of the fastest-growing economic sectors. The trajectory continues upward, with the online travel market projected to reach US$ 31 billion by the end of FY25, boasting a commendable 14% Compound Annual Growth Rate (CAGR) from FY20. According to the India Brand Equity Foundation (IBEF), the country's tourism market is extensive, offering an array of niche products, including cruises, adventure, medical, wellness, sports, MICE (Meetings, Incentives, Conferences, Exhibitions), eco-tourism, film, rural, and religious tourism. Recognized as a spiritual haven for both domestic and international tourists, India's allure in the realm of spiritual tourism remains unparalleled. Looking ahead, the prospects are promising, as the IBEF's February 2023 report anticipates a robust CAGR of 16% between 2021-28, propelling the contribution to the GDP to an impressive US$ 512 billion by 2028. Despite the challenges posed by the pandemic, the travel industry showcased remarkable resilience in FY23, rebounding vigorously. Data from the Directorate General of Civil Aviation (DGCA) underscores this resurgence, revealing a 62% year-on-year increase in domestic airline passengers, soaring to 136 million in FY23 from 84 million in FY22. The trajectory of India's travel and tourism industry appears set for an exponential journey, promising both economic growth and an enhanced global standing.
Ixigo has strategically expanded its reach through a series of acquisitions in various domains:
AbhiBus (Acquired on August 5, 2021): Ixigo acquired AbhiBus, an online Indian ticket booking platform catering to bus and train tickets, among other services. This acquisition strengthens Ixigo's presence in the transportation sector.
Confirmtkt (Acquired on February 4, 2021): Ixigo acquired Confirmtkt, a comprehensive platform serving as a one-stop destination for booking and confirming railway tickets. This strategic move enhances Ixigo's capabilities in the railway ticket booking segment.
Reach App (Acquired on January 11, 2017): Ixigo expanded its portfolio by acquiring Reach App, a mobile application designed for users to explore and download music, games, and other content directly from their friends’ mobile devices. This acquisition adds a new dimension to Ixigo's offerings.
Desi Backpacking Travelers (Acquired on August 7, 2015): Ixigo's acquisition of Desi Backpacking Travelers signifies its interest in content-sharing platforms. This portal facilitates Indian and foreign backpackers in sharing articles and photos of their trips across India, aligning with Ixigo's focus on travel experiences.
Rutogo (Acquired on August 27, 2015 - Owned by Square Hoot Hikes): Ixigo broadened its presence in the transportation sector by acquiring Rutogo, a marketplace connecting taxi vendors from across the country under a unified platform. This acquisition contributes to Ixigo's goal of offering comprehensive travel solutions.
Collaborations of ixigo
Ixigo has entered into collaborations with various organizations. Notable among these are:
A collaboration with Flipkart aimed to enhance the flight reservation process through the Flipkart platform.
A partnership with Indira Gandhi International Airport is designed to facilitate travellers in utilizing the ixigo website.
Working alongside the Andhra Pradesh State Road Transport Corporation (APSRTC), ixigo played a key role in setting up, designing, configuring, and maintaining a "Unified Ticketing Solution" (UTS) on APSRTC's cloud platform.
Promoters of the company
According to the company's Draft Red Herring Prospectus (DRHP) that was submitted to SEBI, there are no discernible promoters.
IPO of ixigo
However, Ixigo is launching its Rs. 1600 crore initial public offering (IPO) in two phases. The first involves the issuance of equity shares worth up to Rs. 750 crores, while the second portion involves an offer for sale (OFS) component worth up to Rs. 850 crores.
Ixigo offer for sale - INR 850.00 cr
Ixigo fresh issue - INR 750.00 cr
Ixigo total ipo size - INR 1600.00 cr
Essentials
Ixigo ISIN - INE0HV901016
Ixigo Face Value - INR 1
Ixigo Total Share - 37,12,03,168
Ixigo Total Income - INR 501.25
Ixigo Market Cap - 5,011.24 Cr
Ixigo Book Value - 5.04
Ixigo Intrinsic Value - INR 180
Ixigo Earning yield - 0.48%
Ixigo Cash Flow Operations - 30.7 cr
Ixigo Cashflow - financing - INR - 2.18 Cr
The public offering's book-running lead managers are —
ICICI Securities Limited, Axis Capital Limited, Kotak Mahindra Capital Company Limited, and Nomura Financial Advisory and Securities
Elevation Capital, Sequoia Capital India, Trifecta Capital, Fosun RZ Capital, and InfoEdge are among the company's investors. In 2011, Elevation Capital and Nasdaq-listed MakeMyTrip invested $18.5 million in ixigo. To date, ixigo has raised $88 Mn in investment.
Shareholding Trend
Board of directors of ixigo
Mr Aloke Bajpai Chairman, Managing Director & Group CEO
Mr. Rajnish Kumar Non-Executive Director & Group CPTO
Mr. Ravi Chandra Adusumalli Non-Executive Director
Mr. Shailesh Lakhani Non-Executive Director
Mr. Arun Seth Independent Director
Mr Mahendra Pratap Mall Independent Director
Ms. Shuba Rao Mayya Independent Director
Mr. Rahul Pandit Independent Director
Mr. Frederic Lalonde Independent Director
Mr. Rajesh Sawhney Independent Director
Group Chief Financial Officer
Mr. Rahul Gautam
Group General Counsel & Company Secretary
Mr. Suresh Kumar Bhutani
|
EaseMyTrip |
106 |
2,120 |
2 |
420 |
|
Yatra |
120 |
1,470 |
1 |
2,000 |
|
MakeMyTrip |
1170 |
11,700 |
8 |
3,200 |
The cruise tourism sector is experiencing rapid growth, and the Indian government anticipates a market size of 1.2 million cruise visitors by 2030-31. To support this, the Ministry of Tourism is investing in developing cruise terminals, lighthouses, and other tourist infrastructure along the coast, aiming to establish domestic and international cruise terminals at selected ports by 2023. Simultaneously, the Indian hotel market, encompassing domestic, inbound, and outbound segments, was valued at approximately ₹2,65,600 Crore in FY20, with projections indicating an expected increase to around ₹4,31,600 Crore by FY27. Moreover, India stands as the world's third-largest and fastest-growing aviation market, boasting a remarkable 10.5% Compound Annual Growth Rate (CAGR). In February 2022, the Airports Authority of India (AAI) and other airport developers outlined an ambitious capital outlay target of Rs. 91,000 crores (US$ 12.08 billion) for the development of the airport industry
Beyond promotional offers and cashback incentives, the platform lacks distinguishing characteristics, indicating a significant lack of competitive advantage in the business. Economic downturns can influence travel spending, reducing Ixigo's revenue and profitability. Furthermore, Ixigo faces stiff competition from well-known online travel firms and global behemoths like MakeMyTrip and Booking.com.
Other expenses
-- source official website
To summarise, while Ixigo works in the dynamic and fast-increasing travel market, there are obstacles and opportunities for development. The lack of a distinct competitive edge, as well as the reliance on marketing, may influence market placement. Economic uncertainty may offer additional hazards to the company's financial success. Navigating the competitive marketplace, especially against established businesses, necessitates strategic thinking and creativity. As India's cruise tourism, hotel market, and aviation industries face substantial upheavals, Ixigo may discover chances for development and distinction by tackling these difficulties and capitalising on emerging trends.
I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.
I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.
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