The TBO Tek IPO, valued at Rs 1,550.81 crores, comprises a fresh issue of 0.43 crore shares worth Rs 400.00 crores and an offer for sale of 1.25 crore shares totaling Rs 1,150.81 crores.

Subscription for the IPO opens on May 8, 2024, closing on May 10, 2024, with allotment expected by May 13, 2024. It is slated to list on BSE and NSE on May 15, 2024. Priced between ₹875 to ₹920 per share, the minimum lot size for application is 16 shares. Retail investors need a minimum investment of ₹14,720.

Axis Capital Limited, Jefferies India Private Limited, Goldman Sachs (India) Securities Private Limited, and JM Financial Limited are the book running lead managers, with KFin Technologies Limited serving as the registrar.

The Offer comprises of the Fresh Issue and an Offer for Sale. An Offer for Sale of up to 12,508,797 Equity Shares and Fresh Issue aggregating up to ₹ 4,000.00 million.

The funds from fresh issue will be utilized towards:

• Expansion of the Supplier and Buyer base
• Amplification of value of our platform by adding new lines of businesses
• Inorganic growth through selective acquisitions and building synergies with our existing platform
• Leveraging data procured to offer bespoke travel solutions to our Buyers and Suppliers.

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About TBO Tek Limited

A leading global travel distribution platform, facilitating seamless transactions between suppliers such as hotels, airlines, car rentals, and transfer providers, and buyers comprising retail agencies, independent advisors, tour operators, and online travel companies. Operating in over 100 countries, the company offers a comprehensive inventory tailored to customer needs, supporting various currencies and providing forex assistance. It has two-sided technology platform that simplifies travel business, allowing suppliers to market inventory and set prices while offering buyers an integrated, multi-currency, and multi-lingual solution for booking worldwide travel. The company has a revenue model including B2B Rate and Commission, optimizing transactions, applying mark-ups or receiving commissions to facilitate efficient travel transactions for both suppliers and buyers.

In 2023, the travel and tourism industry exhibited a robust recovery, with a notable 18.2% year-on-year growth from 2022, reaching a value of US$ 1.9 trillion. Forecasts suggest continued expansion at a compound annual growth rate (CAGR) of 8.2%, poised to reach US$ 2.6 trillion by 2027. Traditionally, seasoned travelers favored developed destinations like the USA and Europe.

However, a rising trend sees first-time travelers seeking unique experiences such as the northern lights and the seven wonders. Generation Z's influence, notably on social media platforms, shapes travel preferences towards 'insta-worthy' destinations. Both supplier and buyer landscapes remain highly fragmented, with a vast number of independent entities in the market, indicating persistent market frictions amid growth opportunities.

The landscape of both, Suppliers and Buyers is highly fragmented. There are about 3.5 - 4 million hotels estimated globally of which only 1.2% are affiliated to top 10 global or regional hotel chains in the world. Fragmentation is even more prevalent in ancillary segments such as car transfers and sightseeing, with only a few large chains and several individual Suppliers.

On the buyer side, globally there are 1.5 - 2 million estimated number of Buyers to whom customers reach out depending upon their needs. Further, the largest OTA serves less than 1.5% of the global travel market and the top 10 OTAs put together serve approximately 4% of the US$ 1.9 trillion global travel market.

RISK ASSOCIATED TO THE ISSUE:

• Dependent on hotels and ancillary bookings: Revenue is dependent on the hotels and ancillary bookings contributing 35.69% revenue from operations for FY21 to 67.83% for FY23 and was 72.47%, for the nine months ended Dec’23.
• Limited range of Suppliers & having pricing pressure: Top 10 suppliers hold approximately 70% of GTV. Suppliers could either reduce the amount of inventory or complete withdrawal of the inventory. Suppliers may reduce or eliminate commissions, incentive payments, including performance-linked bonus, or other compensation payable, or default on or dispute their payment obligations towards the company.
• High Competition: Competition from companies that operate as a distribution network and consolidate demand and supply for segments within the travel industry.
• Third-party data center hosting: Company currently operate platform from third-party data center hosting facilities located in Ireland and Mumbai, Maharashtra with a back-up data centre at Frankfurt, Germany.
• Major Dependence on India: India holds 60% of GTV, followed by Middle East and Africa with 20.41%, then after Europe, Latin America, North America, Asia Pacific.