TBO Tek IPO: The initial public offering of TBO Tek Ltd, which was opened for public subscription on Wednesday, has so far received a muted response from investors. Till 12:37 pm on the second day of bidding on Thursday, the Rs 1,559.81-crore IPO received a 2.24 times subscription, garnering bids for 2,07,56,464 shares as against 92,85,816 shares on offer.
The retail category has received 6.50 times subscription, while the non-institutional investor (NII) category got 3.77 times subscription. The qualified institutional buyers (QIBs) has got just 3 per cent subscription.
The TBO Tek IPO will be closed on May 10. The share allotment will be finalised on May 13, while the listing will take place on May 15 on both NSE and BSE.
The price band of the TBO Tek IPO was fixed at Rs 875-Rs 920 per share.
TBO Tek Limited, founded in 2006, is a travel distribution platform that offers travel inventory according to the needs of its customers and supports a wide range of currencies along with forex help. It was earlier known as Tek Travels Private Ltd.
TBO Tek IPO GMP Today
According to market observers, unlisted shares of TBO Tek Ltd are trading Rs 550 higher in the grey market as compared with its issue price. The Rs 550 grey market premium or GMP means the grey market is expecting a whopping 59.78 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
TBO Tek IPO: Should You Subscribe?
Giving ‘subscribe’ recommendation to the IPO, brokerage Mastertrust in its note said, “In 2023 the travel and tourism industry was $1.9 trillion, and expected to grow at a CAGR of approximately 8.2 per cent to reach $2.6 trillion in 2027. The trend of increasing diversity in who is travelling, why they are travelling and where they are travelling to, creates a large opportunity for Buyers as well as Suppliers. TBO TEK LIMITED being the prominent travel distribution platform takes advantage of an opportunity by aggregating global travel supply and global travel demand on one platform and by enabling Buyers and Suppliers to transact seamlessly.”
It added that the business is currently seeing a huge tailwind from the booming travel and tourism sector post the pandemic which is currently fueling their growth, and businesses like this have a huge operating leverage as the business grows. “We recommend subscribing to this IPO given the huge growth and margin expansion potential.”
Tarun Singh, founder and managing director of Highbrow Securities, said, “TBO Tek Ltd.’s IPO, marked by a substantial Offer for Sale (OFS), presents a complex scenario for potential investors. This global travel distribution leader, set to expand following FY2023’s achievements, navigates an industry vulnerable to global uncertainties, highlighted during the pandemic and current geopolitical tensions limiting travel. Its financials reflect such volatility, suggesting a sensitivity that may not sit well with the steep valuations sought, offering limited medium-term gains for shareholders. Furthermore, the IPO’s structure, heavily leaning on an OFS, and the modest proceeds from the fresh issue raise questions about its adequacy for TBO Tek’s operational scale.”
He added that the company positions itself ambitiously, yet its valuation aspirations, amidst comparisons to disparate peers and ambitious benchmarks, seem misaligned with its strategy and market realities. Investors are left evaluating the potential of this opportunity against a backdrop of financial manoeuvres favouring the insiders and regulatory scrutiny faced by the promoters. Despite support from renowned underwriters, the offering lacks the compelling clarity needed for a strong investment case, prompting me to pivot to SME IPOs that might better reflect value and stability in an unpredictable market environment.
About TBO Tek IPO
TBO Tek IPO is a combination of fresh issue of 0.43 crore shares aggregating to Rs 400 crore and offer for sale of 1.25 crore share aggregating to Rs 1,150.81 crore.
For investors, the minimum lot size for an application is 16 shares. The minimum amount of investment required by retail investors is Rs 14,720. The minimum lot size investment for sNII is 14 lots (224 shares), amounting to Rs 2,06,080, and for bNII, it is 68 lots (1,088 shares), amounting to Rs 10,00,960.
Axis Capital Limited, Jefferies India Private Limited, Goldman Sachs (India) Securities Private Limited and Jm Financial Limited are the book running lead managers of the TBO Tek IPO, while Kfin Technologies Limited is the registrar for the issue.
