The mid-2000s saw the birth of India’s three leading low-cost carriers which led to an unprecedented aviation boom, eventually leading India to becoming the world’s third largest domestic aviation market. In 2006, they conceptualized the TBO platform as a technology tool to simplify the process for travel agents to book airline tickets across multiple airlines. The travel industry is large and fragmented with limited technology adoption. Sticking to the mission of empowering the travel industry with technology, they have been able to grow into a business with global presence and serviced Buyers and Suppliers in over 100 countries as of December 31, 2023. They are one of the leading travel distribution platform in the global travel and tourism industry in terms of GTV and revenue from operations for Fiscal 2023 providing a wide range of offerings operating in over 100 countries by providing Buyers with a comprehensive travel inventory according to the needs of their customers; and supporting a wide range of currencies along with forex assistances. They simplify the business of travel for suppliers such as hotels, airlines, car rentals, transfers, cruises, insurance, rail and others, and retail buyers such as travel agencies and independent travel advisors; and enterprise buyers that include tour operators, travel management companies, online travel companies, super-apps and loyalty apps (“Enterprise Buyers”, together with Retail Buyers, “Buyers”) through the two-sided technology platform that enables Suppliers and Buyers to transact seamlessly with each other. The platform allows the large and fragmented base of Suppliers to display and market inventory to, and set prices for, the large and fragmented global Buyer base. For Buyers, the platform is an integrated, multi-currency and multi-lingual one-stop solution that helps them discover and book travel for destinations worldwide, across various travel segments such as leisure, corporate and religious travel. They have two key revenue models for the transaction, i.e., B2B Rate Model where they receive inventory from Suppliers on which they apply certain mark-up and pass on to the Buyers and Commission Model where the Suppliers fix the price at which they want to sell to the end traveller on which receive commission from the Supplier part of which they retain and part of which they share with the Buyer. They are led by the founders, Gaurav Bhatnagar and Ankush Nijhawan. Their and the constant endeavour to empower the travel ecosystem with technology has contributed to the success. The founders are assisted by a leadership team that has extensive industry experience As per financial performance, TBO Tek Limited has posted total income / net profits of Rs 176.54 Cr / Rs (34.14) Cr (FY21), Rs 511.92 Cr / Rs 33.71 Cr (FY22), Rs 1,085.77 Cr / Rs 148.49 Cr (FY23) and Rs 1,039.56 Cr / Rs 154.17 Cr (Q3 FY24). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 7.6 and average RoNW of 24.08% for last three fiscals. Issue is priced at a P/BV of 18.66 as per NAV of 49.31 as on 31.12.23. If we attribute latest earnings of FY22, FY23, TTM and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 296.29, 67.28, 54.77 and 48.60 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Four lead managers are associated with this IPO, and have handled around 71 IPOs in last three fiscals. Axis Capital Limited: This is 31st Main Board IPO from this BRLM. From last 10 Main Board IPOs, four opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 Main Board IPOs, three are trading below issue price and remaining are trading above issue price. (As on 03.05.2024) Goldman Sachs (India) Securities Private Limited: This is 2nd Main Board IPO from this BRLM. From last 1 Main Board IPOs, that opened below issue price on the day of listing. As of now, from last 1 Main Board IPOs, that is trading above issue price. (As on 03.05.2024) Jefferies India Private Limited: This is 6th Main Board IPO from this BRLM. From last 5 Main Board IPOs, one opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 5 Main Board IPOs, one is trading below issue price and remaining are trading above issue price. (As on 03.05.2024) JM Financial Limited: This is 36th Main Board IPO from this BRLM. From last 10 Main Board IPOs, three opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 Main Board IPOs, four are trading below issue price and remaining are trading above issue price. (As on 03.05.2024) As per financials, TBO Tek Limited has shown good growth, RoNW is 44.04% and P/E is respectively 296.29, 67.28, 54.77 and 48.60 as per FY22, FY23, TTM and annualised FY24 earnings. So, issue looks fully priced compared to peers. Company is one of the leading travel distribution platform in the global travel and tourism industry. The growth of the travel sector will be good and we may see good growth in this sector also. Performance of BRLMS are good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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