TBO Tek Limited IPO Review
TBO Tek Limited, a prominent name in the travel distribution sector, has established itself as a significant player in the global travel and tourism industry. Incorporated on November 6, 2006, as Tek Travels Private Limited, the company transformed TBO Tek Limited, reflecting its broader vision and operational scope.
The company's growth trajectory has been shaped by the vision and efforts of its promoters. Gaurav Bhatnagar and Manish Dhingra stand out as the key figures who, along with other stakeholders, have steered TBO Tek Limited through various phases of expansion and innovation. The recent IPO announcement highlighted the involvement of these promoters, who, along with LAP Travel, TBO Korea, and Augusta TBO, are set to play a pivotal role in the company's future endeavors.
Rooted in the capital city of India, New Delhi, TBO Tek Limited's registered office is located in the bustling commercial hub of South Extension Part-I. This strategic location has provided the company with the necessary impetus to tap into the burgeoning travel market and leverage the city's status as a major economic center.
The inception of TBO Tek Limited dates back to 2006, a period that witnessed a significant boom in the Indian aviation sector. The company was founded with the objective of simplifying the travel booking process for travel agents, which was becoming increasingly complex with the proliferation of low-cost carriers and a growing array of travel services.
The raison d'être for TBO Tek Limited was to create a seamless platform that would bridge the gap between travel suppliers, such as hotels and airlines, and various buyers, including travel agencies and enterprise buyers like tour operators and travel management companies. The company's two-sided technology platform was designed to facilitate effortless transactions, making it a one-stop solution for travel-related needs. The platform's ability to connect over 147,000 buyers across more than 100 countries with over one million suppliers as of June 2023 is a testament to its effectiveness and reach.
TBO Tek Limited stands as a testament to innovative entrepreneurship and strategic business acumen. From its origins in New Delhi to its current status as a global travel distribution powerhouse, the company continues to evolve, driven by a mission to simplify and enhance the travel booking experience for its diverse customer base. As it embarks on its next phase of growth, TBO Tek Limited remains a company to watch in the dynamic landscape of the travel industry.
Competitive Strengths
TBO Tek Limited, a prominent player in the global online travel distribution platform, has established itself as a force to be reckoned with in the travel industry. Founded in 2006, TBO Tek has capitalized on the Indian aviation boom and has expanded its reach to over 100 countries, empowering travel businesses by simplifying bookings for travel agents with airlines and other suppliers such as hotels and car rentals. The company's competitive strengths lie in several key areas that have contributed to its robust market position and promising growth trajectory.
Revenue, Sales, and Profit
TBO Tek Limited, a company established in 2006, has reported a significant financial performance for the fiscal year ending on March 31, 2023. The company's revenue or turnover is recorded in the range of INR 100 crore to 500 crore. There has been a noteworthy increase in the net worth of the company by 27.89%, reflecting a robust growth trajectory. The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) has seen an impressive surge of 164.54%, indicating efficient operational performance. The total assets of TBO Tek Limited have also grown by 23.57%, which suggests a solid expansion in the company's asset base. However, it is important to note that with the increase in assets, the liabilities of the company have risen by 24.95%, which is a factor to consider when assessing the company's financial health. These figures highlight TBO Tek Limited's financial strength and its ability to generate profit while expanding its operations.
Distribution Network and Geographical Reach
The company's platform serves as a bridge connecting over 147,000 buyers, which include travel agencies, with a vast network of suppliers such as hotels, airlines, car rentals, and cruises. As of June 2023, TBO Tek's reach spans more than 100 countries, offering a diverse range of over 7,500 destinations and facilitating approximately 33,000 bookings per day. With a focus on both the supply and demand sides of the travel industry, TBO Tek enables seamless transactions between suppliers and buyers through its technologically advanced, multi-currency, and multi-lingual platform. The company's recent IPO is set to further strengthen and expand its distribution network, aiming to attract new buyers and suppliers, and potentially exploring inorganic acquisitions to bolster its market presence.
Unique Features
TBO Tek Limited, established in 2006 and formerly known as Tek Travels Private Limited, is a global travel distribution platform that has significantly impacted the travel industry. The company specializes in providing a comprehensive travel inventory tailored to the needs of its customers, supporting a wide range of currencies, and offering forex assistance. Its platform stands out for enabling seamless connections between suppliers—such as hotels, airlines, car rentals, transfers, cruises, insurance, and rail companies—and customers, which include travel agencies, independent travel consultants, and corporate clients like tour operators, travel management companies, online travel companies, super apps, and loyalty apps. TBO Tek's technology facilitates sellers in showcasing and marketing their inventory and setting prices for buyers, while buyers benefit from an integrated, multi-currency, and multi-lingual one-stop solution for discovering and booking travel to destinations worldwide, catering to various travel segments such as leisure, business, and religious travel. The platform's design simplifies transactions between buyers and suppliers through a B2B or commission revenue model, empowering travel businesses by streamlining bookings for travel agents with airlines and other suppliers in over 100 countries. TBO Tek's influence extends to over 7,500 destinations, handling an average of 33,000 bookings per day through their platform, which underscores the company's significant role in the global travel and tourism industry.
Investment in Research and Development
TBO Tek Limited, a prominent player in the global travel distribution sector, has been making significant strides in enhancing its platform through strategic investments. The company's recent announcement of an IPO to raise ₹1,550 crore underscores its commitment to growth and innovation. A portion of the net proceeds from this fresh issue, amounting to ₹400 crore, is earmarked for the expansion and strengthening of TBO Tek's platform, which includes adding new buyers and suppliers as well as exploring unidentified inorganic acquisitions. This investment will likely bolster the company's technological capabilities, enabling it to maintain a competitive edge in the rapidly evolving travel and tourism industry. With a history of robust revenue growth and a clear strategy for reinvestment, TBO Tek Limited is poised to continue its trajectory of innovation and market expansion. The company's focus on research and development as a core component of its growth plan is evident in its financial allocations and strategic initiatives.
TBO Tek Limited IPO Details
Issue Date: The issue date in an IPO, also known as the initial offering date, is when a company's stock is first made available for public purchase. This date is a significant milestone in the process of an initial public offering, marking the transition of a company from private to public status. (Issue Date: May 8, 2024 to May 10, 2024).
Listing Date: The listing date refers to the day when the company's shares are officially listed and begin trading on a stock exchange. This is typically several business days (3-6 days) after the issue date after processes like share allotment and finalization are completed. On this date, investors who were allotted shares during the IPO can begin selling them, and new investors can start purchasing them on the exchange at the prevailing market price. (Listing Date: Wednesday, May 15, 2024).
Face Value of Shares: The face value of shares in an IPO, also known as the nominal or par value, is a predetermined fixed price set by the company and mentioned in its memorandum of association. It represents the initial capital contributed by the founders and is used for accounting and regulatory purposes. During an IPO, shares are typically offered at a price higher than the face value, which includes a premium based on market demand and the company's performance indicators. (IPO Face Value: ₹1 per share).
Price Band: A price band of an IPO is the range of prices within which the investors can bid for the shares of a company that is going public. The price band is set by the issuer and the lead managers of the IPO, based on various factors such as the demand and supply of the shares, the financial performance and valuation of the company, and the market conditions. (IPO Price: ₹875 to ₹920 per share).
Lot Size: In an Initial Public Offering (IPO), the lot size refers to the minimum number of shares an investor can apply for. It is a pre-determined set of shares that investors must bid for, and applications must be in multiples of this lot size. The lot size ensures a standardized bidding process and helps in the fair allocation of shares among investors. (Lot Size: 16 Shares).
Total Issue Size: The total issue size represents the total number of shares the company is offering to raise capital through the IPO. This number is determined by the company and its advisors, considering factors like their funding needs and the expected investor demand. The total issue size is then divided by the lot size to determine the total number of lots available for purchase by investors. (Total Issue Size: 16,856,623 shares (aggregating up to ₹1,550.81 Cr)).
Offer for Sale: The offer for sale, which is the amount and type of shares that the company is selling to the public. The offer for sale can be either primary or secondary, or a combination of both. A primary offer for sale means that the company is issuing new shares and raising fresh capital. A secondary offer for sale means that the existing shareholders are selling their shares and receiving the proceeds. A combination offer for sale means that both new and existing shares are being sold. (Offers for Sale: 12,508,797 shares of ₹1 (aggregating up to ₹1,150.81 Cr)).
Fresh Issue: A Fresh Issue in the context of an Initial Public Offering (IPO) refers to the creation and sale of new shares by a company to the public. Unlike an Offer for Sale, where existing shareholders sell their shares, a Fresh Issue results in the generation of new capital for the company. This capital is typically used for growth initiatives such as expansion, research and development, or debt repayment. (Fresh Issue: 4,347,826 shares (aggregating up to ₹400.00 Cr)).
Issue Type: The type of an IPO can vary depending on the market and regulatory conditions. Some of the common types of IPOs are, Fixed priced IPO, Auction IPO, Book Building IPO, and Hybrid IPO. (Issue Type: Book Building IPO).
Listing At: The listing of shares in an IPO refers to the process where a company's shares are introduced to the public stock market, allowing investors to buy and sell the shares through a stock exchange. Once listed, anyone with a brokerage account can buy and sell the company's shares on the exchange. (Listing at: BSE, NSE).
Retail Shares Offered: This refers to the portion of the total shares being made available specifically for individual investors, distinct from institutional investors like banks or hedge funds. Regulatory bodies often mandate a minimum percentage of shares be reserved for retail investors, aiming to promote broader public participation in the capital markets. (Retail Shares Offered: Not more than 10% of the Net Issue).
QIB Shares Offered: QIBs are institutional investors such as banks, mutual funds, insurance companies, pension funds, etc., who have expertise and financial resources to invest in the securities market. They are considered as informed and sophisticated investors who can assess the risks and returns of an IPO. QIBs can bid for up to 50% of the total shares offered in an IPO via the profitability route, or up to 75% of the total shares offered in an IPO via the QIB route. QIBs have to pay only 10% of the bid amount at the time of application, and the rest after the finalization of the basis of allotment. (QIB Shares Offered: Not More than 75% of the Net Issue).
NII (HNI) Shares Offered: NII stands for Non-Institutional Investors, which includes High Net-worth Individuals (HNIs) who bid for shares worth more than ₹200,000. The NII category is reserved for investors who do not fall under the retail or Qualified Institutional Buyers (QIBs) categories. Typically, a certain percentage of the IPO, usually around 15%, is allocated for NIIs to ensure a wider distribution of shares. HNIs within the NII category often have a higher chance of allotment compared to retail investors, making it an attractive option for those looking to invest larger sums in an IPO. (NII (HNI) Shares Offered: Not more than 15% of the Net Issue).
Competitors of TBO Tek Limited
TBO Tek Limited, a prominent player in the business services sector, operates in a competitive market landscape. The company, incorporated in Delhi, has been a part of the industry since 2006 and faces competition from various other firms that offer similar services or operate in the same domain.
One of the notable competitors is Savera Kothari India Private Limited, established in 2010 in Maharashtra, with a paid-up capital of INR 10.43 cr. This company, like TBO Tek Limited, has carved out its own niche in the market.
Another competitor is MRC Exim Limited, also based in Maharashtra and formed in 2015. With a paid-up capital closely matching that of Savera Kothari India Private Limited, MRC Exim Limited is a significant player in the industry.
AmpSolar Technology Private Limited, formed in 2018 in Delhi, is a newer entrant in the market but has quickly established itself with a paid-up capital of INR 10.42 cr. Its presence in the same city as TBO Tek Limited suggests direct competition in the local market.
ALP Overseas Private Limited, with a longer history since 1996 and a paid-up capital of INR 10.42 cr., represents the more established competition, bringing years of experience to the table.
Other competitors include Sanghvi Brands Limited, Atomy Enterprise India Private Limited, Dugar Housing Limited, Radiant Solar Private Limited, Hometech Digital Limited, and BRG Consulting (India) Private Limited. These companies vary in their year of formation, ranging from 1994 to 2019, and have paid-up capitals around the INR 10.40 cr. mark, indicating a robust competitive field where TBO Tek Limited operates.
The competitive analysis of TBO Tek Limited also extends to financial comparisons with other companies in the sector. It's important to note that the competitive landscape is dynamic, with new entrants and existing companies constantly evolving their business strategies. TBO Tek Limited, with its own set of strengths and market positioning, continues to navigate this competitive environment.
Conclusion
In conclusion, the TBO Tek Limited IPO presents a significant event in the financial markets, reflecting the company's robust growth and promising future. With a substantial increase in profit after tax and a strong revenue performance, TBO Tek's financial health appears solid. The IPO, set at a price band of ₹875 to ₹920 per share, aims to raise ₹1,550.81 crore, showcasing the company's confidence in its value proposition. As one of the leading travel distribution platforms, TBO Tek is poised to capitalize on the expanding global travel and tourism industry. Investors considering this IPO should weigh the company's impressive financial trajectory against the inherent risks of the market. Ultimately, TBO Tek's IPO could be a noteworthy addition to a diversified investment portfolio.
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Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing securities, that suit your needs. The performance and returns of any equity stock can neither be predicted nor guaranteed.
FAQs
Q: What is an IPO?
An Initial Public Offering (IPO) is a process through which a privately held company offers its shares to the public for the first time and becomes a publicly traded company.
Q: How can I apply for an IPO?
You can apply for an IPO through various methods:
ASBA (Application Supported by Blocked Amount): In this method, your application money remains in your bank account until the basis of allotment is finalized.
UPI (Unified Payment Interface): You can authorize the blocking of funds in your bank account using UPI while applying for an IPO.
Q: What is ASBA?
ASBA stands for Application Supported by Blocked Amount. It allows your application money to be blocked in your bank account during the IPO bidding process. You continue to receive interest on the blocked amount.
Q: What is the difference between book building and a normal public issue?
Book building is a process where demand for securities is elicited and the price is assessed based on investor bids. In a normal public issue, the price is fixed by the issuer.
Q: Can I make payments through UPI for IPOs?
Yes, you can use UPI as a payment method for IPOs. The UPI platform blocks the funds for IPO applications after you approve the fund block mandate request.
Q: What is the minimum order quantity for an IPO?
The minimum number of shares you can apply for in an IPO is known as the minimum order quantity. It varies for each IPO.
Q: What is the cut-off price in an IPO?
The cut-off price is the price at which you bid for shares without specifying a particular price. It allows you to participate in the IPO without specifying a specific bid price.
Q: Can I revise my bids during the IPO process?
Yes, you can revise your bids multiple times before the IPO bidding period ends.
Q: Which banks offer the ASBA facility for IPOs?
Several banks, known as Self Certified Syndicate Banks (SCSBs), offer the ASBA facility. Some examples include HDFC Bank, ICICI Bank, Axis Bank, and SBI.
Q: How do I find IPO mandates on UPI apps?
You can check the list of UPI handles supported for IPO payments on the National Payments Corporation of India (NPCI) website. These handles allow you to apply for IPOs using UPI.