The IPO of ixigo, operated by Le Travenues Technology Ltd, garnered significant attention on its second day, showing strong investor interest and a steady grey market premium. Opening on June 10th, the ixigo IPO is set to close on June 12th, offering shares priced between ₹88 and ₹93 each. The IPO consists of a mix of fresh issues and offers for sale, with ₹620.10 crore reserved for OFS and ₹120 crore aimed at fresh issues.
Investor response has been robust, with the IPO being subscribed 3.61 times by 11:33 AM on the second day. The retail portion has seen an impressive 10.54 times subscription, the NII segment 5.95 times, and the QIB portion 0.13 times. This enthusiastic participation, particularly from retail investors, suggests a high likelihood of oversubscription and potential gains upon listing.
Despite recent volatility in the Indian stock market, ixigo’s grey market premium remains stable at ₹24, unchanged from Monday. This steady GMP, despite the broader market’s fluctuations, indicates a positive market sentiment towards the IPO. Market observers attribute this resilience to the strong response from primary market investors, which has helped the issue hold its ground amid selling pressures.
Financially, Le Travenues Technology has shown remarkable growth, with revenue from operations rising by 180% in FY 2022 and 32.1% in FY 2023. However, the company reported a loss in FY 2022 due to the pandemic, followed by a net profit of ₹233.96 crore in FY 2023. At the upper price band of ₹93, the company’s market cap stands at ₹3603 crore, translating to a price-to-earnings (P/E) ratio of 41.12x, including one-time exceptional gains. Without these gains, the valuations appear more expensive compared to listed peers.
Experts have offered varied opinions on the IPO. Rajan Shinde, a research analyst at Mehta Equities, recommends a “subscribe with risk” approach, emphasizing ixigo’s robust growth and strong market position in the travel sector. Shinde notes that the higher OFS portion and lower founder holding might be a concern for some investors but acknowledges the company’s potential for long-term growth.
Similarly, Anand Rathi suggests a “subscribe – long term” rating, citing ixigo’s potential for business improvement, brand recall, and scalability, which could lead to increased profitability. Canara Bank Securities also supports a long-term investment, highlighting ixigo’s leadership in the online travel segment and the ongoing shift from offline to online bookings.
The ixigo IPO presents a compelling opportunity for investors willing to take on some risk for the potential of substantial returns. The company’s strong performance in rail bookings, combined with its significant market share through ixigo and ConfirmTkt, positions it well in the rapidly growing travel sector.
While the higher OFS and relatively low founder holding may raise some concerns, the overall financial health and market potential make it an attractive option for those looking to invest in the long-term growth of the online travel industry. As the subscription window remains open, investors will be closely watching the final subscription numbers and the grey market premium to gauge the potential success of ixigo’s public debut.
