Travel Food Services IPO: Complete Guide for Investors

The Travel Food Services IPO is one of the most awaited public issues in India’s travel and hospitality sector. This article provides a comprehensive, easy-to-understand overview of everything investors need to know about the upcoming Offer for Sale (OFS), the company’s business model, financial performance, and competitive strengths.

Let’s unpack the details that matter so you can make a well-informed decision.

IPO Structure and Details

Travel Food Services IPO is planned as a Bookbuilding Offer for Sale, meaning existing shareholders will sell their stakes, and the company itself will not receive fresh capital.

Key Highlights:

• Issue Type: Bookbuilding IPO

• Sale Type: Offer For Sale (OFS)

• Face Value: ₹1 per share

• Listing At: BSE, NSE

• Total Issue Size: Not disclosed, but DRHP suggests a target of around ₹2,000 crore net offer to public

• Price Band: Yet to be announced

• Lot Size: Yet to be announced

Since the dates are not yet announced, investors should stay tuned for official confirmation in the RHP (Red Herring Prospectus) closer to launch.

Reservation Details

The IPO will be reserved in line with SEBI guidelines:

• Qualified Institutional Buyers (QIB): Not more than 50% of the net offer

• Non-Institutional Investors (NII): Not less than 15%

• Retail Individual Investors (RII): Not less than 35%

Important Note: The precise number of shares per category will depend on final offer size and price band disclosure.

Promoter Background and Shareholding

Promoters of Travel Food Services Limited include:

• SSP Group plc

• SSP Group Holdings Limited

• SSP Financing Limited

• SSP Asia Pacific Holdings Limited

• Kapur Family Trust

• Varun Kapur and Karan Kapur

Pre-Issue Shareholding: 100% by these promoters.
Post-Issue Shareholding: To be reduced based on the number of shares offered for sale.

Equity dilution will occur only for existing shareholders, without diluting company reserves since it’s an OFS.

Timeline and Key Dates (Tentative)

While the final schedule is pending announcement, here’s what to expect:

• IPO Open Date: TBD

• IPO Close Date: TBD

• Allotment Finalization: TBD

• Refunds Initiation: TBD

• Credit of Shares to Demat: TBD

• Listing Date: TBD

• Cut-off time for UPI mandate confirmation: 5 PM on IPO close date

Investors should monitor SEBI and exchange announcements for the final timeline.

About Travel Food Services Limited

Incorporated in 2007, Travel Food Services Limited is one of India’s leading airport-focused food and beverage (F&B) companies.

It has two main business verticals:

• Travel QSR (Quick Service Restaurants)

• Lounges

As of June 30, 2024:

• 397 Travel QSR outlets in India and Malaysia.

• Presence in 14 airports in India and 3 airports in Malaysia.

This scale makes Travel Food Services a dominant player in India’s travel retail F&B market.

Travel QSR Business

Travel QSR (Quick Service Restaurant) business is the company’s core revenue driver, featuring:

• 117 partner and in-house brands.

• Diverse food concepts adapted for speed and convenience.

• High-demand locations inside airport terminals.

Popular Indian airports with TFS presence include:

• Delhi Airport (14 years presence)

• Mumbai Airport (15 years)

• Bengaluru Airport (5 years)

• Chennai Airport (11 years)

• Hyderabad, Kolkata, and other major cities.

Key Point: These outlets serve diverse traveler needs with curated cuisines and well-known F&B brands.

Lounge Business

TFS also operates airport lounges, providing premium hospitality to:

• First and business-class passengers

• Airline loyalty programme members

• Select credit and debit card holders

Lounges are critical for enhancing customer experience, commanding higher margins, and reinforcing brand visibility among premium travelers.

Brand Partnerships and Portfolio

TFS’s F&B portfolio includes:

• 117 partner and in-house brands across cuisines.

• Franchised partnerships with high-quality international and domestic brands.

• Proprietary in-house brands tailored for traveler preferences.

This diverse portfolio helps manage risks and respond to evolving customer tastes in the airport environment.

Operational Footprint

• India: Present in 14 airports.

• Malaysia: Present in 3 airports.

Key Strength: Consistent long-term contracts and relationships with airport authorities ensure strategic locations and long-term revenue visibility.

Competitive Strengths

• Leading position in India’s Travel QSR and Lounge sectors.

• Diversified brand portfolio, including both franchised and in-house brands.

• Deep understanding of traveler preferences.

• Quality customer experience built on strong operational excellence.

• Experienced management with strategic partnerships with SSP and K Hospitality.

These competitive advantages support consistent growth and strong financial performance.

Financial Performance Overview

Travel Food Services has demonstrated robust growth across multiple financial indicators.

Consolidated Financials (₹ Crore)

Highlights:

• FY24 revenue at ₹1,462 crore, up ~33% YoY from ₹1,103 crore in FY23.

• Profit After Tax (PAT) up from ₹251 crore to ₹298 crore.

• Consistent EBITDA margin ~39%.

• Low leverage with borrowings under ₹67 crore on ₹850+ crore net worth.

Key Performance Indicators (KPI)

• ROE: 36.57%

• ROCE: 49.97%

• RoNW: 36.14%

• PAT Margin: 20.38%

• EBITDA Margin: 39.38%

These excellent KPIs underline strong profitability and efficient capital utilization.

Strategic Partnerships

TFS benefits from deep partnerships with:

• SSP Group: A leading international travel food operator.

• K Hospitality: Indian F&B specialist.

These partnerships enable global best practices, brand synergies, and operational excellence.

Risks and Considerations

Investors should consider:

• High dependence on travel sector: Susceptible to cyclical demand.

• Airport contracts: Renewals and competitive bidding.

• Operational costs: Premium locations have higher costs.

• Economic downturns: Can reduce air passenger traffic and spending.

Despite these risks, diversification across airports and strong brand partnerships reduce exposure.

Why Invest in Travel Food Services IPO?

• Market leadership in airport QSR and lounges.

• Diversified, high-quality F&B portfolio.

• Strong financials with growing revenue and profit.

• Premium airport presence in India and Malaysia.

• Experienced management with global partnerships.

Conclusion:

Travel Food Services IPO represents a unique opportunity to invest in India’s airport retail F&B space, combining stable cash flows, premium locations, and diverse brands.

As the Indian aviation market grows, demand for quality airport dining and lounges is set to rise, benefiting players like TFS.

Always consult your financial advisor before investing and refer to the final RHP for updated details on price band, dates, and lot size once announced.

This detailed guide is designed to help you understand the IPO thoroughly so you can make an informed investment choice.

Disclaimer:
This article is prepared purely for educational and informational purposes and does not constitute investment advice. Investors are encouraged to perform their own due diligence and consult a SEBI-registered financial advisor before making any investment decisions. Investing in securities is subject to market risks.

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