Ixigo IPO Closes On 12 June; Experts Concern Valuations
Retail investors can bid for the maximum of 13 lots, while for the 1 lot of 161 shares, the minimum investment required is Rs 14,973
Ixigo, an online travel agency (OTA), attempted to raise over Rs 740 crore from the public market through its initial public offering (IPO) is scheduled to close on 12 June for public subscription.
The issue so far has received more than 15 times subscription, whereas the retail segment was filled more than 27 times. Besides, the issue successfully raised Rs 333 crore during the anchor round.
The IPO consisted of a fresh issue worth Rs 120 crore and an offer-for-sale (OFS) component of Rs 620.10 crore with a price band of Rs 88 to Rs 93 per share.
Retail investors can bid for the maximum of 13 lots, while for the 1 lot of 161 shares, the minimum investment required is Rs 14,973.
Ixigo IPO opened on 10 June and scheduled to close on 12 June followed by allotment on 13 June. Subsequently, the IPO will list on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) on 18 June.
Axis Capital, Dam Capital Advisors and JM Financial are the book running lead managers, while Link Intime India is the registrar to the issue.
Analyst Note
“On valuation parse the issue is asking for a market Cap of Rs 3603 crore. While, the company is asking a P/E of 41.12 times (which includes one time exceptional gains) which appears to be fully priced by looking at the near term growth triggers. If we exclude the one time exceptional gains the valuations get more expensive when compared to listed peers,” said Rajan Shinde, Research Analyst, Mehta Equities.
Higher OFS also with the low founder holding gives less skin in the business game which is an area of concern. Hence considering all parameters, we recommend only risk taking investors can ‘Subscribe with risk’ to the IPO for long term perspective only, advised Shinde.
“Looking at the annualised earnings for FY24, the issue looks fully priced. We expect the listing gain of around 30 per cent,” Amit Goel, Co-Founder and Chief Global Strategist, Pace 360.
“Though the valuations are rich, we believe that the nature of the platform business and large industry opportunity size would be the key factors to drive sustained and high earnings growth in future. We, therefore, recommend a “subscribe” rating for the issue,” said Dhruv Mudaraddi, Research Analyst, StoxBox.
IPO Objectives
Company intends to utilise the net proceeds of Rs 120 crore for the part-funding working capital requirements of the company and investments in cloud infrastructure and technology.
Additionally, the proceeds will also be used towards funding inorganic growth through unidentified acquisitions and other strategic initiatives and general corporate purposes.
Besides, the firm will also get benefits on listing in the public market which will enhance the brand’s visibility and provide liquidity to the shareholders.
Firm’s Financials
The firm registered revenue of Rs 517 crore in FY23, compared to Rs 384 crore in FY22.
The firm’s profit after tax (PAT) increased to Rs 23.40 crore in FY23 compared to the loss of Rs 21.09 crore in FY22.
Overall, revenue and PAT increased by 34 per cent and 210 per cent respectively.
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