Key Highlights:

• The IPO size of TBO Tek is Rs 1550.81 crores at the upper price band
• The IPO’s price range is Rs 875-Rs 920
• The company’s listing date is 15th May

As temperatures across India soar, the initial public offering (IPO) market seems to heat up, too. Several mainboard IPOs are in the pipeline, waiting for launch. TBO Tek is one of the mainboard IPOs opened for subscription on 8th May. If you wish to subscribe to it, you should know some essential aspects.

About TBO Tek

TBO Tek operates a B2B travel distribution platform that simplifies travel by centralising transactions. Through its platform, several sellers in travel, such as airlines, hotels, rails, car rentals, etc., can connect with a host of buyers, including travel agencies, tour operators, online travel companies, independent travel advisors, etc. Buyers and sellers can use TBO Tek's platform to conduct transactions seamlessly.

IPO Details of TBO Tek

Through the book-building IPO, the company plans to raise Rs 1550.81 crores at the upper price band. In other words, the issue size of the IPO is Rs 1550.81 crores at the upper price band. Given below are some other essential aspects of this IPO:

The company aims to utilise the funds raised for:

• Investment in technology and data solutions by the company

• Investment in its material subsidiary, Tek Travels DMCC, for onboarding platform users through marketing and promotional activities; and hiring sales and contracting personnel for augmenting its supplier and buyer base outside India

• Investment in sales, marketing and infrastructure to support organisation’s growth plans in India

• Unidentified inorganic acquisitions

Financial overview of TBO Tek

The company's financial overview is a testament to its strong growth over the years. It has consistently achieved impressive results, as evidenced by the following snapshot:

The financials of the company show:

• The company’s total income nearly doubled in FY 23 compared to FY 22.
• The return on net worth in FY 23 has tripled compared to FY 22. Also, it has gone from negative in FY21 to positive in FY 22 and FY 23.
• Diluted earnings per share has been positive in FY22 and FY23 as compared with negative diluted earnings per share in FY21.

Industry snapshot

The travel and tourism industry grew 18.2% year-on-year in 2023 from 2022 and is expected to grow at a CAGR of 8.2% to reach US$ 2.6 trillion in 2027.

Source: RHP

In conclusion It’s imperative that you read the company’s draft red herring prospectus to be aware of the potential risks involved. This will help you make an informed choice and ensure your investment meets your needs.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Neo Research Team, nor is it a report published by the Kotak Neo Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.

Investments in securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. Brokerage will not exceed SEBI prescribed limit.

Source: RHP