IPO Alert: All you need to know about TBO Tek’s upcoming market debut

The global travel and tourism industry was severely affected by the COVID-19 pandemic and its contribution to GDP declined by about 49% in fiscal 2020 from US$ 4.7 trillion in 2019.

Helped by the widespread vaccination drive taking place in India, the country’s tourism sector is predicted to grow at a compound annual rate of 6.9% to $460 billion by 2028, contributing around 9.9% to GDP.

TBO Tek Limited recently submitted draft papers with the Securities and Exchange Board of India, seeking approval to raise ₹2,100 crores through an initial public offering.

 The company’s founders and investors plan to offer shares worth ₹2,100 crores, comprising a fresh issue of shares of face value ₹1 aggregating up to ₹900 crores and an offer for sale of shares worth ₹1,200 crores. It also plans to raise ₹1,800 crores through a pre-IPO placement. The company will reduce the issue size if the pre-placement is successful.

TBO Tek plans to utilize ₹570 crores from the net proceeds for strengthening its new platform by adding new buyers and sellers. The company will also deploy ₹90 crores for strategic acquisitions and investments. The remaining amount will be used for general corporate purposes.

Travel Technology

TBO Tek is one of the largest global travel distribution platforms. The company designs and produces travel applications that allow users to search and book tickets, make online reservations including hotel booking through the internet.

The New Delhi-based company’s online platform allows suppliers to display and market inventory, and set prices for the global buyer base. For buyers, it is an integrated, multi-currency, multi-lingual platform that helps them discover and book travel for destinations worldwide.

Key Numbers

TBO Tek had total revenue of ₹176 crores in the year ended March 2021, compared to ₹588 crores in the previous year. The company suffered a net loss of ₹34.1 crores, versus a profit of ₹72.9 crores in the prior year.

TBO Tek derives a significant portion of its revenue from international travel and tourism. The pandemic-related restrictions have wreaked havoc in the travel and tourism industry. The other key headwinds facing the industry are non-availability and high cost of consumer finance, high interest/exchange rates, and fuel prices, unemployment, and elevated travel cost.