Travel Food Services Limited Files DRHP for ₹2,000 Crore IPO

Travel Food Services Limited (TFS), a major name in the airport travel quick-service restaurant (Travel QSR) and lounge space, has taken its first step toward going public. The company has filed its Draft Red Herring Prospectus (DRHP) with SEBI, aiming to raise ₹2,000 crore through an initial public offering (IPO).

What’s in the IPO?

The IPO is structured as a pure Offer for Sale (OFS), meaning existing shares will be sold, and no fresh funds will go into the company. The Kapur Family Trust, which holds 51% of TFS, will offload some of its stake. The remaining 49% of the company is owned by SSP Asia Pacific Holdings.

Where Does TFS Operate?

Travel Food Services (TFS) operates 335 outlets across 14 Indian airports, 30 outlets at two airports in Malaysia, and 32 highway locations in India. In addition to its quick-service restaurants, TFS manages 31 airport lounges catering to loyalty program customers, with its most recent lounge opening in Hong Kong in July 2024.

How Big is TFS?

In FY 2024, Travel Food Services (TFS) achieved a revenue of ₹1,396.32 crore, showing an increase from ₹1,067.15 crore in FY 2023. The company’s net profit grew to ₹298.02 crore, up from ₹251.29 crore in the previous fiscal year. As per a CRISIL report, TFS holds a 24% revenue market share in India’s airport Travel QSR segment and a dominant 45% share in the airport lounge business, solidifying its position in the sector.

Players in the IPO

Kotak Mahindra Capital, HSBC Securities, ICICI Securities, and Batlivala & Karani Securities will act as the lead book-running managers. The IPO listing aims to bring visibility, improve the brand’s image, and provide liquidity for the shareholders.

Context in the Industry

TFS’s operations are tied to growing passenger traffic in India, especially at airports. Of the 14 airports it serves, 13 are among India’s 15 busiest in FY 2024. It’s important to know that over the last year, two companies in the travel services space, TBO Tek and Le Travenues Technology launched IPOs with listing returns of 52.86% and 78.19%, respectively.

All in all, the TFS IPO shows the increasing demand for convenient dining and premium lounge experiences as travel continues to grow. With a strong foothold in this niche market, the IPO will be closely watched by investors and industry players alike.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.