March 17, 2023

Ixigo generates positive cash flow; puts IPO on back burner amid market crunch

Amid market pressures, Ixigo has put its IPO plans on the backburner in the near future. However, it is confident that it will sustain its growth for the upcoming fiscal with free cash flow. The online travel agency (OTA) has seen a 5x growth in three years which is higher than its pre-Covid levels. It targets 5 crore transactions in a year, said Aloke Bajpai, Co-founder and Group CEO of ixigo.
Speaking to businessline , Bajpai said that ₹1,600 crore IPO is on the back burner for now because the time isn’t right. “Given the state of the markets which haven’t eased out over the past six months, and neither are they stable at the moment with the SVB and other financial crises, the time isn’t right at the moment. Hence, it didn’t make sense for us to go for an IPO right now. Tech IPOs in the US or in India aren’t doing well right now so we do not have a sense of urgency at the moment.”
The company’s Draft Red Herring Prospectus (DRHP) expired recently, and it will have to refile its papers as and when it decides to go ahead with the IPO.
Not cash, but growth
He said that Ixigo’s IPO plans were not because the company was in need of cash, but it was because the company was looking at unleashing growth. “Given the volatile markets right now, we will rely on our free cash flow.
In the previous fiscal, the company generated ₹380 crore revenue and in this fiscal, he expects it to cross over ₹500 crore revenue. “Ixigo grew 5x compared to pre-Cocid levels. Our gross transaction value run rate is above $1 billion a year which is close to ₹8,400 crores a year (run rate) at approximately 700 crore a month. We expect this trajectory to continue, this makes us bullish about our growth.”
Post-Covid trends

Bajpai said that in case there was an acquisition that the company was looking at, it could always rely on venture capital.
Speaking about the segments that are driving the growth for the OTA, Bajpai said that buses, trains and flights contributed extensively for the company in the past few fiscal years. “Due to Covid, we have seen an uptick in online bookings, and we do not see it going back.”
Another trend that he forecasts will not go back to pre-Covid levels is that the airfares and average room rates (ARR). “Post Covid, the people with discretionary spends are taking smaller and frequent trips. They are willing to spend more on flights and hotels. The ARRs in some places have gone up to 80 per cent. On the other hand, airfares too have been way higher than pre-Covid levels.”