IPO-bound Ixigo may not renew its ‘travel services marketplace’ partnership with Flipkart after December 2021. The travel company, which filed its draft red herring prospectus (DRHP) for ₹1,600 crore initial public offering, also said it plans to use the net proceeds for organic and inorganic growth initiatives and relevant acquisitions including the remaining equity share capital of Confirm Ticket.
In its 525-page DRHP, Ixigo’s parent firm Le Travenues Technology Limited said that it plans to use the proceeds towards organic and inorganic growth initiatives. It would include, “potential acquisitions and strategic initiatives, which includes utilisation of up to ₹350 million from the Net Proceeds towards acquisition of the remaining equity share capital of Confirm Ticket.”
Flipkart agreement
In 2019, Ixigo had entered into a ‘travel services marketplace’ agreement with Flipkart where it provides services by allowing Flipkart’s website, m-site and mobile app to display travel services offered by Ixigo for flights. Both companies had aimed to utilise the traffic in Tier-2,3 and 4 cities.
“We do not expect such agreement to be renewed following the expiry of its term on December 31, 2021,” it said in its DRHP.
Other partnerships
Flipkart isn’t the only online portal where Ixigo partnered. It has also partnered with PhonePe to power flight bookings.
It said that it may enter into more such partnerships “that help us broaden our reach and audience within super-apps, payment apps, and horizontal businesses. An inability to enter into and maintain such distribution arrangements could adversely impact our business prospects and financial performance.”
Offer for Sale
Ixigo said that its company is a professionally managed company and does not have an identifiable promoter or a promoter group. Hence, the ₹1,600 crore IPO will also include ₹750 crore worth fresh issue of shares while the rest will be through Offer for Sale (OFS).
This means that its founders, Aloke Bajpai, Chairman, Managing Director and Group CEO and Rajnish Kumar, Non-Executive Director and Group CPTO will participate in the OFS by selling shares worth ₹50 crore each. SAIF Partners (now Elevation Capital) will sell ₹550 crore of shares while Micromax will sell Rs 200 crore worth of shares through the OFS.
Together, they all held 49.55 per cent stake in the company.
Interestingly, despite the pandemic, Ixigo turned profitable. It posted a profit of ₹7.5 crore in FY21, compared to a loss of ₹26 crore in FY20, while it reported total income of ₹138 crore, up from ₹112 crore in FY20.