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Research Primary Market IPO NOTE – TBO TEK LIMITED


Written by - Fisdom Research

May 13, 2024 9 minutes

Company Background 

Established in 2006, TBO Tek Limited, formerly Tek Travels Private Limited, operates as a travel distribution platform catering to diverse customer needs across multiple currencies with forex assistance. The company streamlines travel operations for a spectrum of stakeholders, including hotels, airlines, car rentals, transfers, cruises, insurance, rail companies, and more. It serves retail customers like travel agencies, independent consultants, and corporate clients such as tour operators, travel management firms, online travel agencies, super apps, and loyalty programs through its advanced two-sided technology platform, fostering seamless connectivity between suppliers and customers. 

Company Key Highlights 

TBO TEK Limited, a prominent player in the global travel industry, emerged during India’s aviation boom in the mid-2000s with the goal of streamlining ticket booking for travel agents across multiple airlines. With a commitment to revolutionize the travel industry through technology, TBO TEK expanded its reach globally, serving buyers and suppliers in over 100 countries. Offering a wide range of services, including comprehensive travel inventory and forex assistance, TBO TEK’s two-sided technology platform facilitates seamless transactions between suppliers and buyers, catering to diverse travel segments. Notably, TBO TEK Limited holds the second position in India’s Billing and Settlement Plan (“BSP”)  

  • A two-sided Technology Platform: TBO’s platform fosters a network effect through interconnected flywheels, enriching the value proposition for partners.
  • Scalability: The company has developed a modular and scalable proprietary platform, facilitating the addition of new lines of business, expansion into new markets, and integration of diverse travel products. 
  • Ability to generate large data sets: The company’s proprietary platform generates significant volumes of data, encompassing searches, bookings, invoices, and payments. This data provides insights into consumer behavior, enabling informed business decisions. 
  • Capital Efficient Business Model: The company has formulated an asset-light business model that can be readily scaled without additional Capex. This strategy ensures the maintenance of EBITDA margins while facilitating future growth opportunities. 
  • Inorganic Growth: On March 31, 2022, the company acquired Bookabed, a Europe-based B2B accommodation supplier catering to the UK & Ireland markets. The company plans to pursue similar acquisitions to enhance its platform further.  

Key Business Strengths 

  • TBO TEK Limited’s platform creates a network effect, boosting value propositions for partners through interconnected flywheels. More buyers attract more suppliers, improving pricing, selection, and transaction volume, ensuring ongoing growth by expanding the partner network. 
  • It has a modular and scalable proprietary technology platform allowing the addition of new lines of business, markets, and travel products. 
  • TBO TEK Limited’s Capital-Efficient Strategy Drives Robust Cash Flows and Long-Term Growth. Strategic Acquisitions Expand Partner Network and Market Presence, Offering Diverse Travel Products. Focus on Global Expansion and Supplementary Services Enhances Profitable Development Prospects. 
  • The company has experienced promoters and managers. 

Key Risks to Business 

  • The company relies heavily on a few suppliers for its business operations. Any negative shifts in these relationships or difficulty forming new ones could harm the company’s operations. 
  • India’s tours and travel sector is fragmented, with numerous small, unorganized tour operators alongside established firms, leading to fierce competition in tourism. 
  • significant portion of the company’s revenue comes from its subsidiary, Tek Travels DMCC. Any disruptions to this subsidiary’s business could have adverse effects on the company. 
  • It has reported a loss in the past. 
  • It operates in a highly competitive industry. 

Fisdom Research Assessment: 

TBO Tek company is a major player in global travel and tourism, operating in more than 100 countries. They provide various travel services all in one spot. TBO aims to use the market upswing to generate fresh capital and direct it towards substantive growth. This strategy indicates promoter’s confidence in the company’s prospects and their intention to scale up operations. Considering their earnings for FY24, the stock seems reasonably priced, even though its price-to-earnings ratio is lower than similar listed companies. With bright opportunities ahead, the company expects to continue growing well, especially considering the clear upward trends in global travel. We advise investors to consider participating in its IPO for long-term investment prospects. 

Offer Details 

Offer period 
Bid/Offer Opens On: Wednesday, May 08, 2024 
Bid/Offer Closes On: Friday, May 10, 2024 
Issue Size Price Band Bid Lot 
~ Rs.1,475 – Rs.1,551 Cr Rs. 875 – Rs.920 16 
Particulars Lots Shares Amount 
Minimum 16 RS. 14,720 
Maximum 13 208 Rs. 1,91,360 
Minimum 14 224 Rs. 2,06,080 
Maximum 67 1,072 Rs. 9,86,240 
Minimum 68 1,088 Rs. 10,00,960 

Issue Structure 

QIB Shares Offered Not less than 75% of the offer size 
Retails Shares Offered Not more than 10% of the offer size 
NII (HNI) Shares Offered Not more than 15% of the Net Issue 

Indicative IPO Timeline 

Bid/Offer Opening Date Wednesday, May 8, 2024 
Bid/Offer Closing Date Friday, May 10, 2024 
Finalization of the basis of allotment with  The designated stock exchange Monday, May 13, 2024 
Initiation of refunds Tuesday, May 14, 2024 
Credit of equity shares to depository  Accounts Tuesday, May 14, 2024 
Listing Date Wednesday, May 15, 2024 

Other Details 

Book Running Lead Managers Axis Capital Limited, Goldman Sachs (India) Securities Private Limited, Jefferies India Private Limited, JM Financial Limited 
Objects of the Issue 
1) Expansion of the Supplier and Buyer base.  2) Amplification of value of our platform by adding new lines of businesses.  3) Inorganic growth through selective acquisitions and building synergies with our existing platform.  4) Leveraging data procured to offer bespoke travel solutions to our Buyers and Suppliers. 
Listing At BSE, NSE 

Financial Elements 

Particulars Dec-23 Mar-23 Mar-22 Mar-21 
Total Asset (Cr.) ₹ 3,754 ₹ 2,558 ₹ 1,271 ₹ 576 
Revenue from Operation (Cr.) ₹ 1,023 ₹ 1,064 ₹ 483 ₹ 142 
PAT (Cr.) ₹ 154 ₹ 148 ₹ 34 -₹ 34 
Basic EPS ₹ 15.30 ₹ 14.21 ₹ 3.32 -₹ 3.28 
Diluted EPS ₹ 15.15 ₹ 14.07 ₹ 3.32 -₹ 3.28 
EPS for Dec-23 is not annualised 

Comparison with Listed Industry Peers (Fiscal 2023) 

Particulars TBO Tek Limited Listed Indian peers Listed Global Peers 
Rategain Travel  Technologies Limited Travel CTM Webjet Ltd. 
Revenue (Cr.) ₹ 1,065 ₹ 565 ₹ 3,463 ₹ 1,931 
EBITDA (Cr.) ₹ 182 ₹ 85 ₹ 738 ₹ 887 
EBITDA Margin (%) 17.08% 14.98% 36.99% 24.58% 
RoNW (%) 44.04% 9.64% 6.62% 1.74% 
Basic EPS ₹ 14.21 ₹ 6.29 ₹ 28.14 ₹ 2.01 
Diluted EPS ₹ 14.07 ₹ 6.33 ₹ 28.04 ₹ 2.01 


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