Travels & Rentals, operating under the Lufthansa City Center banner, has been a cornerstone of premium travel services in Kolkata since 1987. With a broad spectrum of clients across various industries like Chemical, Steel, IT, Healthcare, and Real Estate, the company has established itself as a reliable partner in delivering value-added travel solutions backed by end-to-end travel support. This strong foundation is now being leveraged with the launch of their IPO, aimed at capitalizing on the company’s consistent growth trajectory.

IPO Details

The Travels & Rentals IPO is a Fixed Price Issue amounting to ₹12.24 crores, entirely comprised of a Fresh Issue of 30.6 lakh shares. The subscription period for this IPO opened on August 29, 2024, and will close on September 02, 2024. Investors can expect the allotment to be finalized by Tuesday, September 3, 2024, with the shares tentatively listing on the BSE SME on Thursday, September 05, 2024.

The issue price is set at ₹40 per equity share, with a minimum lot size of 3,000 shares. This means that retail investors need to invest a minimum of ₹120,000, while High-Net-Worth Individuals (HNIs) must invest at least ₹240,000 (2 lots or 6,000 shares). The IPO is being managed by Finshore Management Services Limited, with Cameo Corporate Services Limited acting as the registrar, and Black Fox Financial Private Limited as the Market Maker.

Financial Performance

Travels & Rentals has shown remarkable growth over the past three years. The company’s revenue increased from ₹290.59 lakhs in FY22 to ₹579.06 lakhs in FY23, and further to ₹803.54 lakhs in FY24. Similarly, EBITDA surged from ₹157.49 lakhs in FY22 to ₹434.79 lakhs in FY24. The Profit After Tax (PAT) has also shown significant growth, from ₹69.01 lakhs in FY22 to ₹296.55 lakhs in FY24. This steady financial performance underscores the company’s solid foundation and potential for future growth.

Also Read : Archit Nuwood Industries IPO Day 1: Check Review, price band, GMP, and other details

Valuation Insights

The company is issuing shares at a pre-issue EPS of ₹3.64 and a post-issue EPS of ₹2.64. The pre-issue P/E ratio stands at 10.99x, while the post-issue P/E ratio is 15.15x, compared to the industry P/E ratio of 32.05x. Additionally, the Return on Capital Employed (ROCE) for FY24 is 27.54%, and the Return on Equity (ROE) is 26.72%. These metrics indicate that the IPO is fairly priced, offering a balanced opportunity for both listing gains and long-term investments.

Grey Market Premium

The Grey Market Premium (GMP) for the Travels & Rentals IPO is expected to be in the range of ₹16 to ₹20. While GMP can provide an early indication of investor sentiment, it is essential to remember that no real trading occurs in this unregulated market, and hence, it cannot be relied upon for price discovery. However, the GMP suggests potential listing gains of 40% - 50%, reflecting strong investor interest.

Allotment and Subscription Status

As of 06:49 PM on August 30, 2024, the Travels & Rentals IPO has been subscribed 11.21 times on its first day of the subscription period. Investors keen on participating in this IPO can check their allotment status on the Registrar’s website on September 3, 2024. The process is straightforward:

Visit the IPO allotment status page.

Select Travels & Rentals Limited IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to view your allotment status.

Utilization of Funds

The proceeds from the Fresh Issue will be used towards meeting the company’s working capital requirements and for general corporate purposes. Specifically, ₹803.30 lakhs will be allocated for working capital, while ₹250.00 lakhs will be set aside for corporate expenses.

Conclusion

Travels & Rentals Limited has established itself as a leader in the travel services industry, with a robust client base and consistent financial growth. The company’s IPO, with a relatively low P/E ratio and strong return metrics, appears to be fairly valued, offering investors a promising opportunity. The anticipated GMP and strong subscription numbers further highlight the potential for substantial listing gains. Investors with a focus on long-term growth and listing gains should consider applying for the Travels & Rentals IPO.

Also Read : Style Baazar IPO opens today: GMP jumps 25%, should you Bid or Skip?

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX & Upstox.