TBO Tek sets price band at ₹875-920 per share; IPO to open on May 8

TBO Tek, an online travel distribution platform, on Friday, said that it will be offering its shares in the range of ₹875-920 apiece for its ₹1,550.81 crore initial public offering (IPO), which will open for subscription on May 8. The three public issues will close on May 10, while the allotment of shares is expected to be finalised on May 13, and stocks will be listed on the BSE and NSE on May 15.

This is going to be the third IPO to hit D-Street this month after healthcare tech firm Indegene and mortgage lender Aadhar Housing Finance. While the ₹1,842 crore IPO of Indegene will begin on May 6, the ₹3,000 crore issue of Aadhar will kick off on May 8. 

Backed by global private equity firm General Atlantic, the IPO of TBO is a combination of a fresh issue of 0.43 crore equity shares aggregating to ₹400 crore and an offer for sale (OFS) of 1.25 crore shares worth ₹1,150.81 crore. Under the OFS, promoters Gaurav Bhatnagar, Manish Dhingra, and LAP Travel, along with other selling shareholders such as TBO Korea and Augusta TBO, will offload their shares.

As per the shareholding pattern available in the RHP filed with the capital market regulator SEBI, promoters hold 51.26% stake in the company, while 46.43% shares are owned by the public shareholders. TBO ESOP Trust, the non-promoter non-public shareholder, holds 2.31% shareholding in the firm. Among public shareholders, Augusta TBO is the largest shareholder with a 19.53% stake, followed by General Atlantic (15%) and TBO Korea (11.06%).

The lot size for an application is 16 shares, which means the minimum investment amount required by retail investors will be ₹14,720 for one lot.

The company has reserved 75% of the issue for qualified institutional buyers, 15% for non-institutional investors, and the remaining 10% for retail investors.

The company intends to use capital raised from the issuance of fresh equities for the expansion of the supplier and buyer base and for adding new lines of business. A part of the fund will also be utilised for inorganic growth through acquisitions and leveraging data procured to offer bespoke travel solutions to its clients.  

Founded in 2006, TBO is a global travel distribution platform with ₹19,024 crore in gross transaction value (GTV) for FY23 and a presence in 100+ countries as of December 2023. The platform connects over 1,59,000 buyers, including retail buyers, travel agencies and independent travel advisors, with over 1 million suppliers such as hotels, airlines, car rentals, transfers, insurance providers, cruises, rail and other vendors. 

For the financial year 2022-23, TBO posted profit after tax (PAT) at ₹148.49, up 340% from ₹33.72 crore in the same period last year. The revenue increased by 112.09% to ₹1,085.77 as compared to ₹511.93 core in FY22. For the first nine months of the fiscal FY24, the profit and revenue stood at ₹154.18 crore and ₹1,039.56 crore, respectively.

The global travel and tourism market was $1.7 trillion in 2017. In 2023 the travel and tourism industry recovered, growing 18.2% year-on-year from 2022 to $1.9 trillion, and expected to grow at a CAGR of 8.2% to reach $2.6 trillion in 2027.