ixigo IPO day 2: GMP, subscription status to review. Should you apply?

ixigo IPO day 2: The initial public offering (IPO) of ixigo, which opened on 10th June 2024, has received a robust response from primary market investors. The public issue worth 740.10 crore will remain open till 12th June 2024. The company has fixed the ixigo IPO price band at 88 to 93 per equity share, and the book build issue is proposed for listing on BSE and NSE. ixigo IPO is a mix of fresh problems and offers for sale (OFS). The company has reserved 620.10 crore for OFS, while 120 crore is aimed at issuance of fresh issues. As per the ixigo IPO subscription status, the public issue has been booked 1.95 times. Despite the volatility in the Indian stock market, the grey market remained steady regarding the ixigo IPO. According to stock market observers, shares of the ixigo parent Le Travenues Technology Limited are available at a premium of 24 in the grey market today.

ixigo IPO GMP today

As mentioned above, the ixigo IPO GMP (grey market premium) today is 24, unchanged from Monday’s. Market observers say the ixigo IPO GMP remained steady despite volatility on Dalal Street, which augurs well about the book build issue. They say the strong response by the primary market investors could be the probable reason for the public offer holding its fort during Monday’s selling pressure.

ixigo IPO subscription status

After day one of the subscription, the ixigo IPO was booked 1.95 times, whereas its retail portion was booked 6.21 times. The NII segment of the public issue has been subscribed 2.78 times, while the QIB portion has been booked 0.12 times. This level of subscription indicates a strong interest from retail investors, which could lead to oversubscription and potentially higher listing gains for investors.

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ixigo IPO review

Giving a ‘subscribe’ tag to the public offer, Rajan Shinde, Research Analyst at Mehta Equities, said, “By looking at the financials, the company showed a robust growth in revenue from operations in FY2022 and FY 2023 by 180%/32.1%, and net profit(loss) by Rs. -210.94cr/Rs.233.96 cr in FY 2022 & FY 2023. The company posted a loss for FY22 on account of the pandemic. On valuation parse at the upper band of Rs.93/-, the issue asks for a Market Cap of Rs.3603/- Cr. Based on annualized FY 2024 earnings and fully diluted post-IPO paid-up capital, the company is asking a P/E of 41.12x (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. Investors should also understand that the offer with higher OFS and the low founder holding gives less skin in the business game, an area of concern for new investors.”

Based On the strong presence of IXIGO in rail bookings and a significant market share through IXIGO and ConfirmTkt, the company is well-positioned in the rapidly growing travel sector. Considering all parameters, Mehta Equities expert recommends that only risk-taking investors can “SUBSCRIBE with Risk” to the Le Travenues Ltd (IXIGO) IPO for a long-term perspective only.

At an upper band, the company is valued at P/E of 154x while on market-cap/sales, it is valued at 7.2x post issue of equity shares, compared to its peers (Yatra Online – 192x, Easy trip planners – 54.5x) on FY23 earning basis. This indicates a potential for business improvement on the back of industry tailwinds, brand recall and business scalability, resulting in the expansion of profitability. Thus, Anand Rathi recommends an “SUBSCRIBE – long term” rating for the IPO.

Canara Bank Securities has also given the public issue a ‘subscribe’ tag, saying, “We recommend SUBSCRIBE for long-term investment because of its leadership in market share in the online travel segment, a major shift of trends of offline booking to online booking, and adding new routes across so as to increase connectivity.”

Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 11 Jun 2024, 08:46 AM IST

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