Travel Food Services IPO opens on July 7: Check out 10 key things to know from RHP before investing
Travel Food Services IPO has allocated 50% of the shares in the public offering for qualified institutional buyers (QIB), at least 15% for non-institutional investors (NII), and no less than 35% of the offering is set aside for retail investors. The portion reserved for employees has been capped at ₹ 40 million.
The upcoming IPO consists entirely of an offer-for-sale (OFS) of shares worth ₹ 2,000 crore from the Kapur Family Trust, the promoter of the offering. This opportunity includes reserved options for eligible employees to participate in the subscription.
The Kapur Family Trust operates within the K Hospitality brand, which oversees and invests in various businesses in the hospitality and food service industries, including Travel Food Services. Given that this IPO is exclusively an OFS, the company will not receive any funds from this offering, and all proceeds will go to the selling shareholder.
The merchant bankers handling the Travel Food Services IPO are Kotak Mahindra Capital Company, HSBC Securities and Capital Markets (India), ICICI Securities, and Batlivala & Karani Securities India.
Travel Food Services IPO GMP is +92. This indicates Travel Food Services share price were trading at a premium of ₹ 92 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Travel Food Services share price was indicated at ₹ 1,192 apiece, which is 8.36% higher than the IPO price of ₹ 1,100.
Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.
The promoters of the company include SSP Group plc, SSP Group Holdings Limited, SSP Financing Limited, SSP Asia Pacific Holdings Limited, the Kapur Family Trust, Karan Kapur, and Varun Kapur. Collectively, these promoters own a total of 131,679,484 equity shares with a face value of ₹ 1 each, representing 100.00% of the company's issued, subscribed, and paid-up equity share capital.
According to the red herring prospectus (RHP), among the comparable companies are Jubilant FoodWork Ltd, which has a P/E of 205.81, Devyani International Ltd with a P/E of 2,097.13, Sapphire Foods India Ltd at a P/E of 548, and Westlife Foodworld Ltd, which has a P/E of 955.26, along with Restaurant Brands Asia Ltd.
The firm stands out as a prominent entity in the rapidly expanding Indian airport travel quick service restaurant (Travel QSR) and lounge markets, as indicated by revenue figures for fiscal 2025. According to the CRISIL Report, its revenue-based market share is approximately 26% within the Indian airport travel QSR sector and around 45% in the Indian airport Lounge sector for fiscal 2025, which includes contributions from Associates and Joint Ventures.
India is projected to sustain strong growth in both domestic and international air passenger traffic, with domestic air passenger numbers expected to grow at a CAGR of 8% to 9% and international air passenger traffic at a CAGR of 6% to 8% from Fiscal 2025 to Fiscal 2034.
Moreover, the growth in air passenger traffic in India is being driven by the economic accessibility of air travel made possible by low-cost carriers (LCCs). The proportion of LCCs in domestic air passenger traffic has risen from 66% in Fiscal 2016 to 78% in Fiscal 2024, and stands at approximately 75% for the six months ending September 30, 2024.
Travel Food Services has demonstrated robust financial results over the past few years, with profits in fiscal 2025 increasing by 27.4% to ₹ 379.7 crore, and revenue rising by 20.9% to ₹ 1,687.7 crore compared to the previous year. Leading player in the Travel QSR and Lounge sectors in Indian airport. Strong expertise in operating and handling the distinct challenges of F&B in the operationally complex and highly secure airport environment. Proven and established track record of long-term working relationships with airport operators. Diversified portfolio of partner F&B brands franchised from high-quality brand partners and inhouse F&B brands. Deep understanding of traveller preferences with a focus on delivering a quality customer experience. Experienced management team, supported by our synergistic partnerships with SSP and K Hospitality.
The firm manages a Travel QSR and a Lounge operation, with locations in airports across India, Malaysia, and Hong Kong. These operations are conducted both directly and through their Associates and Joint Ventures. Additionally, they run Travel QSRs at specific highways in India.
The firm's group companies include Deluxe Caterers Private Ltd, Global Kitchens Private Ltd, GMR Hospitality Ltd, Kapco Banquets and Catering Private Ltd, Mumbai Airport Lounge Services Private Ltd, Semolina Kitchens Private Ltd, Select Service Partner Malaysia Sdn Bhd, Select Service Partner UK Ltd, SSP Financing UK Ltd, SSP TFS HK Lounge Ltd, Tabemono True Aromas Private Ltd, The Irish House Food and Beverages Private Ltd, Travel Food Works Private Ltd, and Travel Retail Services Private Ltd.
Some of the key risks are as follows; The Travel QSRs and Lounges at the leading five airports accounted for 85.94%, 88.36%, and 90.29% of the firm's operational revenue for the fiscal years 2025, 2024, and 2023, respectively. The termination of their concession agreements or a decline in passenger traffic at these airports could significantly affect their revenue. The company's growth may be negatively impacted by changes in the operating models of their airport operators, potentially decreasing their profit share resulting from the relevant concession agreements with those operators.
A lock-in period of 90 days will apply to 50% of the equity shares allocated to the anchor investors starting from the date of allotment, while the other 50% of the equity shares allotted to the anchor investors will have a lock-in period of 30 days from the date of allotment.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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