LGT Business Connextions Limited, a travel and tourism service aggregator, made a weak stock market debut on 26th August 2025, with shares listing on the BSE SME platform at ₹85.60, a 20% discount to its issue price of ₹107 per share. The stock slipped further post-listing, hitting the 5% lower circuit at ₹81.35, reflecting muted investor sentiment.

This performance stood in sharp contrast to some other recent SME IPO listings that witnessed strong premiums, indicating that investors were cautious about LGT Business Connextions’ financial outlook and concentration risks, despite a modest oversubscription.

IPO Details

The LGT Business Connextions IPO was a Fixed Price Issue worth ₹28.09 crore, comprising:

• Fresh Issue: 23.62 lakh shares aggregating to ₹25.28 crore.

• Offer for Sale (OFS): 2.62 lakh shares worth ₹2.81 crore.

• IPO Price: ₹107 per equity share.

• Market Capitalisation at issue price: ₹100.29 crore.

• Lot Size: 1,200 shares. Retail investors had to apply for a minimum of 2 lots (2,400 shares), requiring an investment of ₹2,56,800.

The issue opened for subscription on 19th August 2025 and closed on 21st August 2025, with allotment finalized on 22nd August 2025. Mark Corporate Advisors Private Limited acted as the lead manager, Skyline Financial Services Pvt Ltd as registrar, and Asnani Stock Brokers Pvt Ltd as market maker.

IPO Subscription Status

On closure, the IPO was subscribed 1.24 times overall, with participation from retail and non-institutional investors. Despite being fully subscribed, the modest demand compared to high-demand SME IPOs indicated restrained appetite.

Grey Market Premium (GMP)

The LGT Business Connextions IPO GMP remained at ₹0 throughout the pre-listing period, signaling a lack of speculative interest in the grey market. Market watchers had anticipated a flat or discounted listing, which materialized with shares debuting 20% lower.

Company Overview

LGT Business Connextions Limited, founded in 2016, operates as a service aggregator in the travel and tourism industry. Its brand LGT Holidays provides a wide range of services including:

• MICE travel (Meetings, Incentives, Conferences, and Exhibitions).

• Cruise bookings, hotel reservations, and sightseeing tours.

• Customized travel packages and in-transit arrangements.

• Corporate travel management, ticketing, and visa services.

The company does not own travel or hotel inventory but instead consolidates offerings from third-party service providers such as hotels, airlines, and cruise companies. Revenue is earned through commissions and direct billing.

As of March 2025, the company employed 81 staff across sales, operations, HR, and management functions, with banking support from IndusInd Bank Limited.

Business Model

• Commission-Based Revenue: Earns income from commissions on hotel bookings, airline ticketing, and bundled travel packages.

• Corporate Travel Focus: Strong presence in MICE services for corporate clients, offering end-to-end event and travel solutions.

• Service Aggregation: Consolidates travel needs—accommodation, tickets, visas, insurance—under one package.

• No Inventory Ownership: Minimal asset base; operates three leased flats for accommodation but no owned hotels, transport, or flight inventory.

Industry Landscape – Tourism & Hospitality in India

India’s tourism and hospitality industry is on a strong recovery path post-pandemic:

• Ranked 39th in WEF’s Travel & Tourism Development Index 2024.

• 9.24 million foreign tourist arrivals in 2023, up 43.5% YoY.

• Contributed US$ 199.3 billion to GDP in 2023, projected to grow to US$ 512 billion by 2028.

• Religious tourism, medical tourism, and eco-tourism emerging as strong segments.

• The sector generated 35 million jobs in FY23, expected to reach 50 million jobs within 5–7 years.

Government support, including e-visa facilitation, Swadesh Darshan, PRASHAD schemes, and infrastructure investment, is further boosting growth.

Business Strengths

1. Experienced Promoters: Founded by industry veterans with decades of expertise.

2. Comprehensive Service Portfolio: Covers domestic and international travel, events, ticketing, visas.

3. Corporate Travel Expertise: Strong foothold in MICE segment, offering high-value solutions.

4. Order-Driven Scalable Model: Low capital intensity with flexibility to expand services.

5. Client Relationships: Established partnerships with corporates and repeat business base.

Business Risks and Concerns

1. Revenue Concentration: Nearly 100% of revenues come from MICE and hotel bookings, indicating high dependency.

2. Geographical Concentration: Majority of revenues from Telangana, Tamil Nadu, and Kerala, exposing company to regional risks.

3. Dependence on Corporate Clients: Vulnerable to economic downturns and corporate travel budget cuts.

4. No Long-Term Supplier Contracts: Reliance on hotels, airlines, and other providers without exclusivity.

5. Weak Grey Market Sentiment: Absence of GMP ahead of listing reflected low investor confidence.

Use of IPO Proceeds

The IPO proceeds will be utilized for:

1. ₹1,043.61 lakh – Capital Expenditure.

2. ₹770 lakh – Working Capital.

3. ₹378.88 lakh – General Corporate Purposes.

Market Debut in Context

The 20% discount listing and immediate fall to the lower circuit highlight weak investor confidence in LGT Business Connextions, despite growth in India’s tourism industry. Analysts suggest that the high minimum investment size (₹2.57 lakh) and concentration risks could have deterred retail participation.

While the company operates in a sector with strong long-term growth potential, its asset-light aggregator model faces stiff competition and dependency challenges, making investors cautious about its financial stability and scalability.

The Upcoming IPOs in this week and coming weeks are Amanta Healthcare, Rachit Paints, Abril Paper Tech, Sneha Organics, Sugs Lloyd, Anlon Healthcare, NIS Management, Sattva Engineering Construction, Globtier Infotech, Current Infraprojects, Vikran Engineering.

The Current active IPO are Shivashrit Foods, Anondita Medicare, Classic Electrodes (India), ARC Insulation & Insulators.

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