TBO TEK IPO Review: TBO TEK is coming up with its IPO issue of Rs. 1,550.81 Cr which will open on 8th May 2024. The issue will close on 10th May and be listed on the exchange on 15th May 2024. The company will issue fresh shares worth ₹400 Cr and the remaining ₹1,150.81 Cr will be an Offer For Sale (OFS). This article will analyze the GMP, financials, strengths, and weaknesses of the TBO TEK IPO Review 2024. Keep reading to find out!

TBO TEK IPO Review – About the Company

TBO TEK is one of the leading travel distribution platforms in the global travel and tourism industry operating in over 100 countries. It provides buyers with a comprehensive travel inventory according to the needs of their customers and supports a wide range of currencies along with forex assistance.

The Company simplifies the business of travel for suppliers such as travel advisors, hotels, airlines, car rentals, transfers, cruises, insurance, rail, and others. For Buyers, which are its end consumers this is an integrated, multi-currency, and multi-lingual one-stop solution that helps them discover and book travel for destinations worldwide.

TBO’s two-sided technology platform enables Suppliers, (hotels & other travel agencies) and Buyers (end customers) to transact seamlessly with each other. It allows a large and fragmented base of Suppliers to display and market inventory to, and set prices for, the large and fragmented global Buyer base. 

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As of FY23, TBO has made an average of 41,000+ bookings per day through its platform, with 7500+ destinations sold in 100+ countries. The average booking accepted through TBO has skyrocketed from just 13,396 in FY21 to 41,218 in FY23. This has led to its Gross Transaction value increasing from Rs. 3085 Cr in FY22 to Rs. 19,024 Cr in FY23.

TBO TEK IPO Review – About the Industry

Over the past 100 years, the travel and tourism industry has changed from a simple point-to-point travel solution to an ecosystem catering to both, business (“B2B”) and individual travelers (“B2C”), offering holistic solutions that encapsulate diverse customer needs and preferences across the entire travel journey.  

The global travel and tourism market was US$ 1.7 trillion in 2017. In 2023 the travel and tourism industry recovered, growing 18.2% year-on-year from 2022 to US$ 1.9 trillion, and expected to grow at a CAGR of 8.2% to reach US$ 2.6 trillion in 2027. Emerging economies, led by China and India, are leading this growth. 

According to the World Data Lab, India and China are expected to add over half a billion new consumers by 2030 (representing 55% of the global total). As per the Ministry of External Affairs, Government of India, over 12.9 million passports were issued during 2022 by the Passport Issuing Authorities in India, compared to 8.5 million in 2021. 

According to the United Nations World Tourism Organization (UNWTO), 135 more countries in 2019 had more than one million international arrivals in a year, which is approximately 25 more countries when compared to approximately 110 countries in 2010. 

Due to the COVID-19 pandemic, during 2020-2021 only a few countries had more than one million international arrivals while in 2022, 82 countries witnessed more than one million international arrivals. 

Suppliers such as hotels, experience providers, and car rental companies, can expect to serve guests from an increasing number of countries. Similarly, travel buyers can expect to serve a growing base of travelers who are willing to spend more on travel and are constantly seeking newer destinations to travel. 

TBO TEK IPO Review – Financial Highlights

TBO TEK reported a revenue of Rs. 1086 Cr in FY23, which increased by 34% from Rs. 512 Cr in FY22. The Company’s revenue skyrocketed from a small sum of just Rs. 177 Cr in FY21, returning a CAGR of 148%. The reason behind the sky high growth can be attributed to the acquisition of Bookabed.

The Company just turned profitable in FY22 reporting a Net Profit of Rs. 34 Cr. In FY23 its net profit jumped 4.4x to hit a record Rs. 148 Cr. A higher revenue and the ability to sustained and slightly increase margins allowed TBO to scale its Net Profits effectively.

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TBO TEK IPO Review – Key Players 

As the Company is a pioneer in its field of business, we cannot find direct peers to the Company. However RateGain, a SaaS Company in the similar travel and hospitality segment can be considered as its lowest september. Few other listed Companies are Travel CTM and Webjet Ltd.

Compared to RateGain, TBO TEK is double the size in its revenue, but with a networth just half the size of RateGain. However, due to the high equity base, rategain is a poor performer returning a Return on Equity of just 10% as compared to 44% of TBO.

The Company RateGain listed itself on the exchange on 17th December 2021 at a price of Rs. 340. As of 03rd of May 2024, the stock has nearly doubled to reach a price of Rs. 674 with a Price-to-earnings ratio of 144x. Compared to its peer, TBO at a higher issue price of Rs. 920 and basic earnings of Rs. 14.21 will be issued at a PE of 64x. 

Source: RHP of the Company

Strengths of the Company 

  1. A two-sided Technology Platform: TBO’s platform creates a network effect with interlinked flywheels enhancing the value proposition for partners.
  2. Scalability: The Company has built a modular & scalable proprietary platform that allows adding new lines of business, markets, and travel products.
  3. Ability to generate large data sets: As the Company has built its proprietary platform that generates large volumes of data, it houses the data related to searches, bookings, invoices, and payments. This data can be used to get insights into consumer behavior & make business decisions accordingly.
  4. Capital Efficient Business Model: The Company has developed this asset-light business model which can be scaled easily without further Capex. This will allow the Company to maintain its EBITDA Margins and also scale up in the coming years
  5. Inorganic Growth: On March 31, 2022, it acquired Europe-based Bookabed, a B2B accommodation supplier serving the UK & Ireland markets. The Company will continue to make such acquisitions that can help strengthen its platform.

Weaknesses of Company

  1. Segment-specific Risk: Revenues of TBO have a significant exposure to hotel & ancillary bookings, which contributed to 68% of revenue in FY23. 
  2. Dependence on Suppliers: The entire business of TBO is dependent on the limited range of its suppliers with whom it has long-standing relationships. The Company is also exposed to pricing pressures as set by suppliers.
  3. Dependence on Technology: The Company depends on its proprietary technology for critical functions of its business. Failure to maintain these systems or properly upgrade them on time can lead to disruptions causing an adverse effect on business operations.
  4. Cases by Government Authorities against Promoter: The Joint Managing Directors of TBO have received a show cause notice from the Enforcement Directorate. They may be subject to regulatory actions or penalties for certain Non-Compliance
  5. Highly Competitive Industry: TBO operates in a highly competitive industry where competition from other peers regarding its distribution network or consolidation of demand & supply in the market can affects its revenues.

TBO TEK Limited IPO Review – GMP

The shares of TBO TEK traded at a 43.48% premium in the grey market on 03rd May 2024. The shares in Grey Market traded at Rs 1320. This gives it a premium of Rs 400 per share over the cap price of Rs 920.

TBO TEK IPO Review – Key IPO Information

IPO SizeRs. 1550.81 Cr
Fresh IssueRs. 400 Cr
Offer for Sale (OFS) Rs. 1,150.81 Cr
Opening date8 May 2024
Closing date10 May 2024
Face ValueRs. 1
Price BandRs. 875 - 920
Lot Size16 Shares
Minimum Lot Size1 Lot (16 Shares)
Maximum Lot Size13 Lots (208 Shares)
Min. InvestmentRs. 14,720
Listing Date15 May 2024

Promoters: Ankush Nijhawan, Gaurav Bhatnagar, Manish Dhingra, Arjun Nijhawan and LAP Travel Pvt Ltd

Book Running Lead Manager: Axis Capital Ltd, Goldman Sachs (India) Securities Ltd, Jefferies India Pvt Ltd, and JM Financial Ltd

Registrar to the Offer: KFin Technologies Ltd

The Objective of the Issue

  1. Rs. 135 Cr will be utilized to further strengthen the Company’s technology and data solutions
  2. Rs. 100 Cr will be utilised to invest in Company’s material subsidiary, Tek Travel, for onboarding platform users through marketing & promotional activities.
  3. Rs. 25 Cr will be used to invest in sales, marketing and infrastructure to support the organisation’s growth plans
  4. Rs. 40 will be set aside for inorganic expansions via Acquisitions
  5. The remaining amount will be utilised for General Corporate Purposes


TBO TEK is a leading travel distribution platform operating in over 100 countries. The company has demonstrated impressive growth, with revenues increasing at a CAGR of 148% over the last two years and turning profitable in FY22. The IPO proceeds will be used for technological enhancements, user acquisition, marketing, and potential acquisitions.

While TBO has strengths like a scalable two-sided platform, data-driven insights, and a capital-efficient model, it also faces risks such as segment concentration in hotels and ancillaries, dependence on suppliers and technology, regulatory issues against promoters, and intense competition.

At an issue price of Rs. 920, valuing the company at a P/E of 64x (based on FY23 earnings), the IPO appears reasonably priced compared to its peer RateGain (trading at 144x P/E). However, investors should carefully evaluate the risks and opportunities before subscribing to the IPO.

Written by Nasir Hussain

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