TBO Tek Limited IPO

Last Updated on October 17, 2023 by BFSLTeam BFSLTeam

Do you love travelling and always harboured the desire to invest in the tourism industry? Well, you should be aware of the fact that TBO Tek Limited, a leading global travel service provider, has filed its draft papers with the market regulator SEBI (Securities and Exchange Board of India).

For those who are unaware, TBO Tek is a B2B (business-to-business) company that designs and produces travel apps. It is a global travel distribution platform that uses technology to empower the travel industry.

Interested? If you want to know the details of TBO Tek Limited IPO, give this blog a quick read.

About the Company—TBO Tek Limited

In the mid-2000s, India witnessed the launch of three low-cost carriers—Go Air, Indigo, and Spicejet started operating in the arena of Indian aviation. It led to the massive growth of aviation and it ultimately culminated in India becoming the third-largest domestic aviation market in the world. 

The idea behind the TBO platform was formulated in the year 2006. It was to develop a technology tool that would make it easier for travel agents to book airline tickets across different companies. It was the mission of TBO Tek to empower the travel industry with technological solutions enabling easy ticket bookings. 

Gradually, the company grew into an important global travel distribution platform. Today, it offers its services to buyers and suppliers in nearly 100 countries. The platform hosts around 1 lakh buyers and allows travel to 5000+ destinations.

What does TBO Tek Limited do? In short, it provides a common platform for suppliers (airlines, hotels, car rentals, cruises, transfers, rail, insurance, and others), buyers (retail buyers like travel agencies and independent buyers like travel advisors), and enterprise buyers such as travel management companies, tour operators, super-apps, online travel companies, and loyalty apps.

The two-sided technology platform offered by TBO Tek enables buyers and suppliers to make easy transactions with one another. Often the base of suppliers can be large and quite fragmented. TEBO Tek’s platform enables suppliers to easily display, set prices, and market their products for their buyers.

Through TBO Tek, buyers get access to an integrated, multi-lingual, and multi-currency supporting platform that they can use to discover and book travel for various destinations across the world. Common travel segments include corporate, leisure, and religious travel. 

TBO Tek Limited IPO Objectives and Details 

What does TBO Tek plan to do with the proceeds of its IPO? First, it will use the net proceeds of the public issue to further strengthen its technology platform. The company wants to acquire new buyers and sellers. Moreover, the funds gathered from the IPO will be used to promote inorganic growth and make strategic acquisitions. 

The company has filed a DRHP for raising around Rs. 2,100 crore through an initial public offering. The fresh issue of equity shares aggregates up to Rs. 900 crore while the Offer for Sale (OFS) size aggregates up to Rs. 1,200 crore. It’s offered by several investor-selling shareholders and promoter-selling shareholders.

TBO Tek plans to raise Rs. 9 billion by selling new stocks. Moreover, it has plans to raise Rs. 1.8 billion via a pre-IPO placement. Another important point you need to remember is that the investors and founders of TBO Tek plan to sell shares which are worth Rs. 12 billion. 

Also Read: How Can You Analyse An IPO?

Strengths 

These qualitative factors of TBO Tek listed below will help you have a clearer understanding of the potential of this company. Moreover, these strengths act as the foundation for computing the offer price:

• TBO Tek improves the value proposition for its partners by creating a network effect with interlinked flywheels.
• The company can generate, analyse and leverage large sets of data to its advantage. Big Data drives its decision-making process across various enterprises.
• TBO Tek’s offerings are scalable and modular. Its platform enables easy additions of new business lines, travel products, and markets.
• While the company is led by an able founder, it also has a professional management team that has experience in technology and deep travel.
• The business model of TBO Tek is quite capital-efficient and has a combination of profitability and strong growth.

Risks Involved

Analysing the risks involved with investing in an IPO is always recommended. Check out the risks involved with TBO Tek:

• The company derives a significant portion of its revenue from the global tourism industry. If external factors have a negative impact on the global tourism industry, they will have an adverse impact on TBO Tek’s overall business, financials and bottom line.
• TBO Tek’s business depends on its relationship with its suppliers to a great extent. If there are any adverse changes in these relationships, they will have an adverse effect on the company’s overall business.
• Suppliers of TBO Tek may alter the terms of business arrangements. They may reduce or eliminate commissions, incentives, or other commissions. These may have a negative impact on TBO Tek’s business.

Conclusion 

You can consider investing in TBO Tek Limited IPO if you have always wanted to invest in the global tourism industry. The company which empowers the Indian and global tourism industry with technology has recently filed its DRHP with market watchdog SEBI. 

Go through the strengths and weaknesses provided in this blog before making a decision. 

Also Read: IPO investment strategy

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