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TBO Tek IPO generates high investor interest as GMP surges a day before subscription opens
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
In the unlisted market, shares of TBO Tek are trading at a premium of ₹530, a day ahead of the issue opening.
The initial public offering (IPO) of B2B travel distribution platform TBO Tek will open for subscription on Wednesday, May 8. The three-day bidding process will conclude on May 10. The company plans to raise around ₹1,551 crore from the issue, at the upper end.
In the unlisted market, shares of TBO Tek are trading at a premium of ₹530, a day ahead of the issue opening.
The grey market is an unofficial ecosystem where shares start trading before the allotment in the IPO and until the listing day. Most investors track the GMP to get an idea of the listing price.
TBO Tek will be selling its shares in the range of ₹875-920 apiece for its maiden public offer. Investors can bid for a minimum of 16 equity shares in one lot and in multiples thereafter.
The offer includes fresh equity of ₹400 crore and an offer for sale (OFS) of up to 1.25 crore shares by promoters and investors.
Under the OFS, promoters Gaurav Bhatnagar, Manish Dhingra, LAP Travel and other selling shareholders TBO Korea, Augusta TBO will offload the shares.
Currently, promoters own a 51.26% stake in the travel distribution platform and 46.43% shares are held by the public shareholders, while TBO ESOP Trust, the non-promoter non-public shareholder has 2.31% shareholding.
Augusta TBO is the largest public shareholder with a 19.53% stake, followed by private equity firm General Atlantic with a 15% stake and TBO Korea 11.06%.
As much as 75% of the issue has been reserved for qualified institutional buyers, 15% for non-institutional investors, and the remaining 10% for retail investors.
The capital raised from the fresh issue will be used for the growth and strengthening of the platform by adding new buyers and suppliers, unidentified inorganic acquisitions, and general corporate purposes.
Business overview
TBO Tek offers travel inventory according to the needs of its customers and supports a wide range of currencies along with forex help. The firm enables sellers to show and market their inventory and set prices for buyers.
The New Delhi-based company offers services to hotels, airlines, car rentals, transfers, cruises, insurance and rail companies. It also offers services to retail customers such as travel agencies and independent travel consultants, and corporate customers.
Financials
TBO Tek, which follows an asset-light business model, posted healthy growth in its financials with profit growing 340% year-on-year to ₹148.5 crore in the year ended March FY23 and revenue from operations surging 120% to ₹1,064.6 crore as against the previous year.
In the nine months period ended December 2023 (the part of FY24), the company has already surpassed its FY23 profits and recorded over ₹1,000 crore income on the topline front. Its net profit rose 28% year-on-year to ₹154 crore and revenue jumped 31% to ₹1,024 crore, compared to the nine-month period of previous fiscal FY23.
Axis Capital, Goldman Sachs (India) Securities, Jefferies India, and JM Financial are the book-running lead managers while Kfin Technologies is the registrar to the issue.
The company will finalise the basis of allotment of IPO shares by May 13 and the equity shares will be credited to demat accounts of successful investors by May 14. Investors can start trading in its equity shares on the BSE and NSE with effect from May 15.
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