 "IPO")
TBO Tek, a travel distribution platform, has set its eyes on the Europe and North American markets for expanding its reach. The company, which filed its draft red herring prospectus (DRHP) to raise Rs 400 crore in fresh capital in November, derives about 15 per cent of its gross transaction value (GTV) from the two regions. About 60 per cent of its GTV comes from India, down from more 80 per cent in FY21.
TBO connects over 147,000 buyers (travel agencies) and suppliers (hotels, airlines, car rentals and cruises) in more than 100 countries. With the IPO proceeds, the company plans to invest in developing its platform to get new clients, mainly in mature markets such as Europe and North America.
TBO operates most of its business outside India through a wholly-owned subsidiary Tek Travels DMCC. Headquartered in Dubai, Tek Travels DMCC operates through a network of step-down subsidiaries.
READ: Entero Healthcare Solutions set to launch Rs 1,600-crore IPO on February 9
READ: Entero Healthcare Solutions set to launch Rs 1,600-crore IPO on February 9
After the IPO, TBO will invest Rs 100 crore in Tek Travels DMCC. This will be used for marketing and promotional activities; hiring sales and other personnel for augmenting supplier and buyer base outside India.
“To expand geographically in large markets like North America, Europe, and APAC, we would require significant expenses for entering into a new market across various aspects including brand building, brand and product awareness, leadership hiring and other related marketing and promotion activities,” said the DRHP.
Also Read
TBO had 5,005 suppliers at the end of FY23, more than doubling in two years. The monthly transacting buyers on its platform rose from 10,401 in FY21 to 24,530 in FY23.
To meet the increasing travel demands, TBO also intends to spend at least Rs 260 crore fuel growth and onboard new buyers and suppliers. About Rs 50 crore of the issue proceeds will be used to support India growth plans.
READ: Investors subscribe Park Hotels IPO 59.66 times on final day of bidding
In 2023, the travel and tourism industry was pegged at $1.9 trillion. The industry is estimated to grow at an annualised rate of over 8 per cent to $2.6 trillion by 2027.
Axis Capital, Goldman Sachs, Jefferies and JM Financial are the four investment banks handling TBO’s IPO, which is awaiting the Securities and Exchange Board of India’s approval.
