TBO Tek IPO closes today: issue receives 7.5 times subscription, check GMP today

TBO Tek IPO: TBO Tek Ltd’s IPO, which closes on Friday, has seen increased investor participation on the final day of its issuance. Till 11.41 am on the last day of bidding on Friday, the Rs 1,559.81 crore IPO received a subscription of 7.47 times, attracting bids for 6,93,22,896 shares against 92,85,816 shares on offer.

TBO Tek’s IPO was opened for public subscription on Wednesday.

The retail category received subscriptions 13.55 times, while the non-institutional investors (NII) category received subscriptions 15.59 times. The qualified institutional buyers (QIBs) subscribed only 1.36 times.

The allotment of shares will be completed on May 13, while the listing will take place on May 15 on both NSE and BSE.

The price range of TBO Tek’s IPO was set at Rs 875-Rs 920 per share.

Founded in 2006, TBO Tek Limited is a travel distribution platform that offers travel inventory based on the needs of its customers and supports a wide range of currencies along with forex assistance. It was previously known as Tek Travels Private Ltd.

TBO Tek IPO GMP today

According to market observers, unlisted shares of TBO Tek Ltd are trading Rs 540 higher in the gray market compared to the issue price. The gray market premium of Rs 540 or GMP means that the gray market expects as much as 58.7 percent listing gain from the public issue. The GMP is based on market sentiment and continues to change.

The ‘gray market premium’ indicates that investors are willing to pay more than the issue price.

TBO Tek IPO: Should You Subscribe?

Brokerage Mastertrust recommended subscribing to the IPO in its note: “By 2023, the travel and tourism industry was worth $1.9 trillion, and is expected to grow at a CAGR of approximately 8.2 percent to reach $2.6 trillion by 2027. The increasing diversity in who travels, why they travel and where they travel to creates great opportunities for both buyers and suppliers. TBO TEK LIMITED, the prominent travel distribution platform, is capitalizing on an opportunity by bringing together the global travel supply and demand on one platform and enabling buyers and suppliers to transact seamlessly.”

It added that the company is currently experiencing a huge tailwind from the booming post-pandemic travel and tourism sector currently fueling their growth, and that these types of companies have tremendous operational leverage as the business grows. “We recommend subscribing to this IPO given its enormous growth and margin expansion potential.”

Tarun Singh, Founder and Director, Highbrow Securities, said: “The IPO of TBO Tek Ltd., marked by a substantial offer for sale (OFS), presents a complex scenario for potential investors. This global travel distribution leader, which will expand following fiscal 2023 results, is driving an industry vulnerable to global uncertainties, which have been highlighted during the pandemic and current geopolitical tensions limiting travel. The financials reflect such volatility, indicating a sensitivity that may not be well aligned with the steep valuations sought, leaving shareholders with limited gains over the medium term. Furthermore, the structure of the IPO, which relies heavily on an OFS, and the modest proceeds of the new issue raise questions about its suitability for TBO Tek’s operational scale.”

He added that the company is positioning itself ambitiously, but its valuation aspirations, amid comparisons with disparate peers and ambitious benchmarks, appear to be out of step with strategy and market realities. Investors should assess the potential of this opportunity against the backdrop of financial maneuvering in favor of insiders and regulatory scrutiny that the promoters face. Despite the backing of reputable underwriters, the offering lacks the compelling clarity needed for a strong investment case, prompting me to opt for SME IPOs that may better reflect value and stability in an unpredictable market environment.

About the IPO of TBO Tek

TBO Tek IPO is a combination of a fresh issue of shares of 0.43 crore, worth Rs 400 crore, and an offer for sale of shares of 1.25 crore, worth Rs 1,150.81 crore.

For investors, the minimum lot size for an application is 16 shares. The minimum investment amount required by retail investors is Rs 14,720. The minimum investment in lot size for sNII is 14 lots (224 shares), which works out to Rs 2,06,080, and for bNII, it is 68 lots (1,088 shares), which works out to Rs 10,00,960.

Axis Capital Limited, Jefferies India Private Limited, Goldman Sachs (India) Securities Private Limited and Jm Financial Limited are the lead managers of the TBO Tek IPO, while Kfin Technologies Limited is the registrar for the issue.