TBO Tek IPO Day 2: Should you subscribe or not? Check GMP, key dates, review, subscription status, more.

On its opening day, TBO Tek IPO got off to a strong start, with nearly all of its categories being fully booked. After just a few hours of launch yesterday, the retail portion was fully booked due to the overwhelmingly positive reaction. Both non-institutional investors and employees responded favorably to the IPO. Qualified institutional buyers are yet to catch up with the momentum. TBO Tek IPO subscription status was 1.15 times, as per BSE data.

The retail investor category got 3.14 subscriptions, the non-institutional investor quota received 2.08 subscriptions, and the Qualified Institutional Buyers (QIBs) component was booked at 1%. There have been 2.23 subscriptions made to the employee section.

The company streamlines the travel industry for suppliers such as hotels, airlines, car rentals, transfers, cruises, insurance, rail companies, and others. It also caters to retail customers like travel agencies and independent travel consultants and corporate customers like tour operators, travel management companies, online travel companies, super apps, and loyalty apps. All of these parties benefit from the seamless communication that is made possible by the two-sided technology platform.

Also Read: TBO Tek IPO day 1: GMP, subscription status, review, other details of General Atlantic-backed IPO. Apply or not?

The founder of Kejriwal Research and Investment Services, Arun Kejriwal, claims that the firm is adding new products to its lineup and has just added the Eurail to the platform.

On a fully diluted basis, the company reported an EPS of ₹14.07 for the year that concluded in March 2023. The PE band would be 62.19-65.39 based on this EPS. In essence, the organizations listed are online travel agencies such as Make My Trip, Easy Trip, and Yatra Online, who will be utilizing the platform provided by TBO Tek Limited. India doesn’t have any peers that are comparable in this market. According to Arun, the issue has potential for listing as well as for the medium to long term.

TBO Tek IPO, which opened for subscription yesterday (Wednesday, May 8), will close on Friday, May 10.

TBO Tek IPO details

The ₹1,550.81 crore TBO Tek IPO consists of an offer-for-sale (OFS) of up to 12,508,797 equity shares with a face value of Re 1 each by the promoters and other investors, as well as a fresh issuance of ₹400 crore.

52.12 lakh shares of the company will be offered through OFS, according to announcements made by Manish Dhingra, LAP Travel, and Gaurav Bhatnagar, the promoters. The company’s other investors, TBO Korea and Augusta TBO, who own respective holdings of 11.06 percent and 19.53 percent, will sell 72.96 lakh shares.

Public shareholders control 46.43 percent of TBO Tek, while corporate promoters own 51.26 percent of this online travel distributor, according to the Red Herring Prospectus for the company’s IPO.

Also Read: TBO Tek IPO: Issue subscribed 1.15 times on Day 1 led by retail, NIIs. Check GMP, subscription status, key dates, more.

The largest public investor in the company is Augusta TBO, holding 19.53 percent of the shares. General Atlantic owns 15,635,994 company shares, or 15% of the company’s total paid-up capital.

11,523,854 shares, or 11.06 percent of the company’s total shareholding, are owned by TBO Korea. The TBO ESOP Trust, a non-promoter and non-public shareholder entity, owns the remaining 2.31 percent of the company, with promoters and public shareholders owning 98.54 percent.

TBO Tek IPO Review

Indsec Securities

The brokerage claims that the TBO Tek IPO is valued at 52.8x TTM P/B and 7.7x FY23 P/S at the upper price band on a post-issue basis. The brokerage feels there is upside potential and that the issue is priced properly. RateGain Travel Technologies, its closest competitor, is valued at 8.9x TTM P/S and 61.1x TTM P/E. Because of the scale that it can handle through its platform and the addition of supplementary business lines that meet the demands of suppliers and buyers, the brokerage has a “Subscribe” rating on the firm. TBO Tek is well-positioned to handle the extremely fragmented market environment and meet new needs with tech-based learnings, as the travel and tourism market is predicted to grow at an 8.2% CAGR between FY23 and FY27.

According to the brokerage firm, the company is valued at 64.74x P/E for FY2023; This price seems reasonable given the lack of domestically listed competitors for direct comparison and the company’s expected pivotal position in profiting from the growing penetration in the travel industry.

On the other hand, Yatra Online and Easy Trip Planners are the company’s stated industry competitors. Easy Trip Planners provides a wide range of travel-related goods and services under the main brand, “Ease My Trip.” Yatra Online, on the other hand, specializes on offering thorough information, specifics about prices, availability, and booking options to both domestic and foreign clients. Because of the growing level of competition, the brokerage advises subscribing to the issue in order to benefit from listing profits.

Also Read: TBO Tek IPO to open tomorrow: GMP, issue details, 10 key things to know before investing ₹1,551-crore issue

TBO Tek IPO GMP today

TBO Tek IPO gray market premium is +540. This indicates TBO Tek share price were trading at a premium of ₹540 in the gray market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the gray market, TBO Tek IPO expected listing price was indicated at ₹1,460 apiece, which is 58.7% higher than the IPO price of ₹920.

‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.

Also Read: TBO Tek IPO: Travel company garners ₹696.5 crore from anchor investors ahead of IPO

Disclaimer: The views and recommendations above are those of individual analysts, experts and brokering companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.