TBO Tek IPO opens on May 8

Dalal Street is gearing up for the launch of TBO Tek’s initial public offering (IPO) next week. The IPO subscription is scheduled to begin on May 8 and conclude on May 10, 2024, with the price range anticipated to be disclosed by the end of this week. Preceding the subscription period, the anchor book of the public issue is slated to open for a day on May 7.

The IPO entails a fresh issuance of shares valued at INR 400 crore by the company, along with an offer-for-sale (OFS) of 1,25,08,797 equity shares by promoters and investors. Promoters Gaurav Bhatnagar, Manish Dhingra, and LAP Travel intend to collectively sell 52.12 lakh equity shares through the OFS, while investors TBO Korea and Augusta TBO plan to divest 72.96 lakh shares.

At present, promoters hold a 51.26% stake in the travel distribution platform, with 46.43% of shares owned by public shareholders. TBO ESOP Trust, a non-promoter non-public shareholder, holds a 2.31% shareholding. Among public shareholders, Augusta TBO emerges as the largest with a 19.53% stake, followed by private equity firm General Atlantic with 15% and TBO Korea with 11.06%.

Founded by Gaurav Bhatnagar and Ankush Nijhawan, TBO Tek positions itself as a leading global travel distribution platform based on Gross Transaction Value (GTV) and revenue from operations in FY23. Out of the net proceeds from the fresh issue, the company intends to allocate INR 260 crore towards growth and platform enhancement, including the addition of new buyers and suppliers. Additionally, INR 40 crore will be earmarked for unidentified inorganic acquisitions, with the remainder reserved for general corporate purposes.

Operating on an asset-light model, TBO Tek has demonstrated robust financial performance, with profits surging 340% year-on-year to INR 148.5 crore in FY23, while revenue from operations witnessed a 120.3% growth to INR 1,064.6 crore compared to the previous year. In the nine-month period ending December 2023 (part of FY24), the company surpassed its FY23 profits and achieved revenue exceeding INR 1,000 crore. During this period, net profit grew by 28.2% year-on-year to INR 154.2 crore, and revenue increased by 30.7% to INR 1,023.8 crore compared to the same period in the previous fiscal year.

Regarding IPO allocation, 75% of the net public issue is reserved for qualified institutional buyers, 15% for non-institutional investors, and the remaining 10% for retail investors. The basis of IPO share allotment is expected to be finalised by May 13, with equity shares credited to successful investors’ demat accounts by May 14. Trading in TBO Tek’s equity shares on the BSE and NSE is slated to commence from May 15.

Axis Capital, Goldman Sachs (India) Securities, Jefferies India, and JM Financial are acting as the book-running lead managers to the issue, overseeing the IPO process.