IPO listed on 15 May'24
TBO Tek Ltd
Minimum Investment
₹ 14,720 / 16 shares
Grey market premium
₹ 530 (58% premium)
Issue price
₹ 920
Listing price
₹ 1,426
Listing gains
506 (55%)
Listing on
May 15, 2024
Our Verdict:
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- TBO Tek has demonstrated significant financial performance since FY21, showcasing substantial growth over the past two years. It is distinguished by a robust balance sheet with over Rs 400 crore in net cash and superior return ratios compared to its industry counterparts.
- The global outbound travel market remains largely fragmented, with traditional travel agents covering a vast market without efficient access to global inventory. TBO TEK addresses this gap by serving as a centralized hub that efficiently connects real-time supply with buyers.
- From a valuation standpoint, the IPO appears fully priced at a Price-to-Earnings (P/E) multiple of 48.6x, calculated against projected FY24 earnings post-IPO. However, the premium is justified given the firm’s unique position as a global platform without direct competition in India. Additionally, the grey market premium (GMP) also suggests a solid listing on the bourses.
- Given the firm’s strong financial health, competitive edge, and the flourishing travel and hospitality sector, investors may consider subscribing to the IPO from a long-term perspective.
About the company
Founded in
6 Nov'06
Managing director
Gaurav Bhatnagar, Ankush Nijhawan
- TBO Tek is a leading travel distribution platform in the global travel and tourism industry, serving over 100 countries. It does not engage directly with travellers but serves as a central platform for travel agents, independent travel advisors, tour operators, travel management companies, online travel agencies (OTAs), and super-apps to access a wide range of travel-related services, including flights, hotels, car rentals, transfers, cruises, insurance, cargo, marine, rail, and sightseeing packages.
- TBO Tek’s business solutions are designed to tackle challenges in discovery, reliability, transactions, and services by amalgamating global travel supply and demand on a unified platform, which simplifies the interaction between buyers and suppliers. As of December 31, 2023, the firm has catered to over 7,500 destinations globally and has a workforce exceeding 2,000 employees.
STRENGTHS
- Established Market Presence: TBO Tek holds a strong position in both the airline ticketing and hotel segments, servicing over 20,000 travel agents and partnering with more than 700,000 hotels in over 100 countries. Although its operations span several countries, the bulk of its Gross Merchandise Value (GMV) is concentrated in India and Dubai.
- Impressive Financial Performance: TBO Tek has demonstrated strong and consistent financial growth, with a Compound Annual Growth Rate (CAGR) of 174% in operational revenue from FY21 to FY23. The firm significantly improved its net profit, turning around from a loss of Rs 34.14 crore in FY21 to a profit of Rs 33.72 crore in FY22, and then making a substantial jump to Rs 148.49 crore in FY23.
- Diverse Revenue Streams: A majority of TBO Tek's revenue comes from the airline and hotel industries, earning net commission fees of approximately 3%-4% from airlines and 6-8% from hotel fees and mark-ups. Additionally, the firm provides technical/software-related services domestically and internationally, offering clients a shell website to operate as a B2B hotel service provider by integrating their own suppliers.
- Enhanced Profitability Margins: TBO Tek has shown significant improvement in profitability margins, with an EBITDA margin of 18.69% in FY23, which increased to 19.59% by 9M FY24.
- Growing Booking Volumes: TBO Tek’s daily bookings have grown at a CAGR of 73% from 13,396 in FY21 to 40,164 in FY23, with a further increase to 44,592 by 9MFY24.
RISK FACTORS
- Dependency on Specific Segments: TBO Tek's revenue is heavily reliant on hotel and ancillary bookings, which have increased from 35.69% of its revenue from operations in FY21 to 67.83% in FY23. Any negative impact on this segment could adversely affect the firm’s overall business.
- Dependence on Key Supplier Relationships: TBO Tek’s success depends critically on its partnerships with a limited number of suppliers. Deterioration in these relationships, or challenges in forging new ones, could negatively impact the firm’s operations. However, this dependency has been decreasing. In FY23, the top five suppliers accounted for 57.4% of GTV, down from 69.7% in FY21.
- Risks Associated with Subsidiaries: A significant portion of TBO Tek's revenue is generated by its material subsidiary, Tek Travels DMCC. Any adverse developments affecting this subsidiary could have a detrimental effect on the parent company's financial health.
Issue details
Issue type
Mainstream
Issue size
₹ 1,550.81 crore
Fresh Issue
₹ 400 crore
OFS
₹ 1,150.81 crore
Price range
₹ 875 - 920
Lot size
16 shares
Issue Objective
The net proceeds from the fresh issue are intended to be utilised towards:
- Expanding the supplier and buyer base;
- Enhancing the value of the firm's platform by introducing new lines of business;
- Pursuing inorganic growth through selective acquisitions that complement existing operations; and
- Leveraging collected data to deliver customized travel solutions to buyers and suppliers.
Dates
Bidding open
8 May'24
Bidding close
10 May'24
Allotment date
13 May'24
Refund date
14 May'24
Listing
15 May'24
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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