Le Travenues Technology, the company behind the online travel platform Ixigo, witnessed a strong response on Day 2 of its IPO. The offering was subscribed over 9 times, fueled by significant retail investor demand. However, before jumping on the bandwagon, a closer look at the company’s fundamentals and market dynamics is crucial.

High Subscription: A Double-Edged Sword

Ixigo’s IPO garnered significant interest, particularly from retail investors. This strong subscription translates to a lower chance of receiving allotment for individual applicants. With oversubscription, the number of applications far exceeds the available shares. This means a large portion of applicants might not receive any shares, even if they bid for the minimum lot.

Decoding the Grey Market Premium (GMP)

The grey market premium (GMP) for Ixigo shares is currently around ₹29, indicating a potential listing price of ₹122 per share (issue price + GMP). This translates to a possible listing gain of over 30%. However, the GMP is an unofficial indicator and doesn’t guarantee actual listing price performance.

Beyond the Hype: Considering Ixigo’s Financials

While the travel sector is expected to grow, Ixigo operates in a competitive landscape with established players like MakeMyTrip and Goibibo. It’s essential to analyze Ixigo’s financial health to assess its long-term potential. Here are some key aspects to consider:

  • Profitability: Ixigo is yet to turn profitable, which is a concern for some investors. Evaluate their profitability roadmap and revenue streams.
  • Debt Levels: A high-debt burden can limit future growth and financial flexibility.
  • Growth Strategy: Analyze how Ixigo plans to capture market share and differentiate itself from competitors.

Should You Apply?

The decision to invest in Ixigo’s IPO depends on your risk tolerance and investment goals. Here’s a breakdown to help you decide:

  • For Aggressive Investors: If you have a high-risk tolerance and a long-term investment horizon, Ixigo’s IPO could be a potential opportunity. However, be prepared for volatility and conduct thorough research.
  • For Conservative Investors: If you prioritize stability and established companies, consider investing in well-performing players already listed on the stock exchange.

Final Thoughts

Ixigo’s IPO has garnered significant interest, but a measured approach is crucial. Analyze the company’s financials, understand the competitive landscape, and factor in your risk tolerance before making a decision. Remember, the GMP is just an indicator, and listing gains are not guaranteed.