Travel portal ixigo filed its draft red herring prospectus (DRHP) with SEBI a few days ago. The third travel app to have gone public after MakeMyTrip and EaseMyTrip, ixigo intends to raise Rs 1,600 crore through its initial public offering (IPO).
With a war chest of Rs 1600 crore post IPO, ixigo could be a serious contender for MakeMyTrip in the coming months. MakeMyTrip has already raised funds to support and channel their growth. In 2011, MakeMyTrip invested ixigo to the tune of $4.8 million. Early this year they exited through a secondary sale after making a handsome 8X return on their investment.
Currently, Elevation Capital (formerly SAIF Partners) owns a 24 percent stake, SCI Investments 16.02 percent, and Gamnat owns 9.89 percent in ixigo. The co-founders, Aloke Bajpai and Rajnish Kumar hold 9.18 percent and 8.79 percent stake, respectively. Hyderabad-based Abhibus also has a 2.31 percent stake in ixigo. Post the IPO, Elevation Capital and Micromax will make a partial exit.
The company via its IPO is looking to raise Rs 750 crore through a primary fundraise and Rs 850 crore via an offer for sale (OFS) from existing investors. In its DRHP, the company has stated the proceeds from the IPO will be deployed towards building its organic and inorganic growth. Also, a part of the proceeds would be apportioned for general corporate purposes.
Acquisitions to funnel growth
ixigo acquired Hyderabad-based Abhibus for an undisclosed amount earlier this month and a 100 percent stake in train booking app company, Confirmtkt. With these two acquisitions, ixigo is now the second-largest online travel aggregator in India after MakeMyTrip in terms of gross bookings in 2021. EaseMyTrip and Yatra stood at third and fourth positions respectively.
Though ixigo has not been focusing on the flight booking space, it still controls a 12 percent market share. In the train booking space, it commands a 42 percent market share due to its acquisition of Confirmtkt, and with Abhibus coming on board, ixigo has a 10 percent market share in the bus booking space. MakeMyTrip has a 60 percent market share in the bus booking space after it acquired RedBus and a lion’s share in the flight booking space.
The travel booking app wants to be in the sweet spot and not compete with the likes of MakeMyTrip for it has its eyes on the rail and road travel market. In 2020-21 alone, 93 percent of its transactions were from tier II or tier III cities. As per its DRHP, out of the 100 million journeys Indians make each day, 70 percent are by road and 24 percent by train and they are betting big on these numbers to fuel their growth to unprecedented levels.