TBO Tek IPO: Public Issue Subscribed 86x On The Last Day Of Bidding; GMP Hints Premium Listing

The TBO Tek IPO draws to a close today, with overwhelming subscription figures signalling strong confidence in the company's potential. The IPO, which commenced on May 8, has witnessed an astounding 86.06 times subscriptions by 4:10 pm today, as per data from the Bombay Stock Exchange (BSE).

The bidding frenzy underscores the market's enthusiasm for TBO Tek, with various investor categories showing significant interest. Non-institutional investors have subscribed 50 times their quota, while retail investors have shown substantial participation with a subscription rate of 23.18 times. Qualified Institutional Buyers (QIBs) have demonstrated exceptional confidence, oversubscribing their portion by a staggering 125.51 times. Even the employee portion has been oversubscribed 15.62 times, indicating internal optimism within the company.

This surge in subscriptions follows a trajectory over the past three days of bidding. On the second day, the subscription rate reached 4.15 times, while on the opening day, it stood at 1.15 times, showing a rapid escalation in investor interest as the IPO progressed.

The TBO Tek IPO, priced in the range of Rs 875 to Rs 920 per equity share with a face value of Re 1, has a total valuation of Rs 1,550.81 crore. The offering consists of a fresh issue of ₹400 crore and an offer-for-sale (OFS) of up to 12,508,797 equity shares by the promoters and other investors.

TBO Tek intends to deploy the funds to expand its supplier and buyer base, introduce new business lines, pursue strategic acquisitions, and leverage acquired data to offer customized travel options, as outlined in its Red Herring Prospectus (RHP).

Key information from the RHP sheds light on the company's ownership structure. The promoters, including Ankush Nijhawan, Gaurav Bhatnagar, Manish Dhingra, Arjun Nijhawan, and LAP Travel Private Limited, collectively hold a majority stake of 51.26%. Public shareholders own 46.43% of the company, with notable entities such as Augusta TBO, General Atlantic, and TBO Korea among the significant shareholders.

Augusta TBO emerges as the largest public shareholder, with a 19.53% stake in the company, followed by General Atlantic holding 15% of the firm's total paid-up capital. TBO Korea owns 11.06% of the company's shares, while the TBO ESOP Trust, a non-public shareholder and promoter entity, holds the remaining 2.31%.

Formerly known as Tek Travels Private Limited, TBO Tek Limited has positioned itself as a travel distribution platform, leveraging cutting-edge technology to connect suppliers and customers seamlessly. With a diverse client base spanning corporate entities such as tour operators, travel management companies, and online travel agencies, as well as retail clients including travel agencies and independent consultants, TBO Tek caters to a broad spectrum of travel needs.

Operating in the vibrant travel and tourism sector, TBO Tek taps into an industry that has witnessed remarkable growth and transformation. From its humble beginnings as a simple point-to-point travel solution, the sector has evolved into a comprehensive ecosystem catering to both individual and business travellers. In 2023 alone, the global travel and tourism market surged by 18.2%, reaching a valuation of US$1.9 trillion, and is projected to grow at a compound annual growth rate (CAGR) of 8.2% to hit US$2.6 trillion by 2027.

Between fiscal years ending on March 31, 2022, and March 31, 2023, the company witnessed a 112.09% increase in revenue and a 340.4% surge in profit after tax (PAT). Such robust financial growth underscores the company's ability to capitalize on emerging opportunities.

While Travel CTM boasts a P/E ratio of 28.34 and Webjet Ltd stands at 213.16, TBO Tek's Indian counterpart, RategainTravel Technologies Ltd, holds a P/E ratio of 113.31. This comparison highlights TBO Tek's competitive edge and its compelling value proposition within the industry.

As the IPO journey unfolds, investor interest is further fueled by the lock-in arrangements for anchor investors. Within a 90-day period following allocation, 50% of the Equity Shares allotted to Anchor Investors will be subject to lock-in, with the remaining shares locked in for 30 days post-allotment. Such measures not only instil confidence among investors but also signify a strategic approach to long-term growth and stability.

The overwhelming response to the TBO Tek IPO underscores investor confidence in the company's growth prospects and vision. As the bidding concludes today, all eyes are on the allotment process and the subsequent debut of TBO Tek on the stock exchanges, expected to be met with anticipation from market participants.