Is TBO TEK LIMITED the Next Multibagger IPO? Find Out Here!

GLOBAL TRAVEL AND TOURISM INDUSTRY:

Over the past 100 years, the travel and tourism industry has changed from a simple point-to-point travel solution to an ecosystem catering to both, business (“B2B”) and individual travelers (“B2C”), offering holistic solutions that encapsulate diverse customer needs and preferences across the entire travel journey

• The total market of travel and tourism industry in 2023 :
  • The global travel and tourism market was US$ 1.7 trillion in 2017. In 2023 the travel and tourism industry recovered, growing 18.2% year-on-year from 2022 to US$ 1.9 trillion, and expected to grow at a CAGR of 8.2% to reach US$ 2.6 trillion in 2027

• Travel and tourism contribution to Gross Domestic Product (“GDP”) is expected to grow at a CAGR of 6% during 2023 to 2027

EMERGING OPPORTUNITIES IN GLOBAL TRAVEL AND TOURISM INDUSTRY

• Saudi Arabia is the fastest growing tourist destination market in Middle East 
  • Traveling & tourism contribution to GDP in saudi from 2023 to 2030 USD Bn 79.9 to 140.6 USD Bn (7.3% CAGR)
  • The goal is to significantly boost the sector’s contribution to the economy, aiming for it to represent 10% of the GDP by 2030. Remarkably, recent projections suggest it might even reach 15% of the GDP by 2030, exceeding the original target
• Traveling & tourism contribution to GDP in Umrah from 2023 to 2027 USD Bn 7.2 to 13.8 USD Bn (17.7% CAGR)

Business travel market

• From 2017 to 2019 USD Bn 373 to 412 USD Bn (5.1% CAGR)
• From 2020 to 2022 USD Bn 168 to 300 USD Bn (33.7% CAGR)
• From 2023 to 2027 USD Bn 374 to 510 USD Bn (8.1% CAGR)

MAP FOR TRAVEL AND TOURISM INDUSTRY VALUE CHAIN

INDIA TRAVEL BUYER MARKET (2023-2027)

GLOBAL AIR TRAVEL MARKET 

• From 2017 to 2019 USD Bn 700 to 740 USD Bn (2.8% CAGR)
• From 2020 to 2022 USD Bn 230 to 518 USD Bn (50.1% CAGR)
• From 2023 to 2027 USD Bn 709 to 885 USD Bn (5.7% CAGR)

INDIA AIR TRAVEL MARKET 

The domestic air market is expected to significantly drive the recovery of airlines market and is expected to grow by CAGR of 15.8% between 2023 and 2027 to reach US$ 29.3 billion by 2027.

GLOBAL ACCOMMODATION MARKET 

• From 2017 to 2019 USD Bn 732 to 846 USD Bn (7.5% CAGR)
• From 2020 to 2022 USD Bn 401 to 813 USD Bn (42.4% CAGR)
• From 2023 to 2027 USD Bn 855 to 1250 USD Bn (10.0% CAGR) 

TBO TEK LIMITED Background:

Company was incorporated as ‘Tek Travels Private Limited on November 6, 2006, at New Delhi as a private limited. The name of our Company was changed to ‘TBO Tek Private Limited’, a on October 22, 2021. Company was subsequently converted into a public limited company and the name of our Company was changed to ‘TBO Tek Limited’

TBO TEK LIMITED at a Glance 

• 7500+ destinations sold over 100 countries
• 41000+ booking per day through platform
• 11 languages supported in platform
• 2000 global headcount
• 55+ currencies accepted for booking
• 47 countries with commercial team
• Our Market Opportunity:

In 2023 the travel and tourism industry was US$ 1.9 trillion, and expected to grow at a CAGR of approximately 8.2% to reach US$ 2.6 trillion in 2027.

Global Footprint of  TBO TEK LIMITED

TBO TEK LIMITED Platform

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Platform We are one of the leading global travel distribution platforms. (Source: 1Lattice Report) Our platform connects over 159,000 Buyers across more than 100 countries with over one million Suppliers, as of December 31, 2023.

Revenue Models of TBO TEK LIMITED:

• B2B Rate Model(7.25% take rate for hotels & ancillaries FY 23) We receive inventory from our Suppliers at a special B2B rate. We apply a certain mark-up on this rate and pass this price on to Buyers. 
• Commission Model(2.59% take rate for airlines FY 23). Our Suppliers fix the price at which they want to sell to the end traveller. We receive commission on each such transaction from the Supplier, part of which we retain and part of which we share with the Buyer. Typically, our contracts with airlines follow this model.

Main Objects of TBO TEK LIMITED :

• To do the business of building and selling travel technology software for booking of airline tickets, hotels, rail and other travels products on the internet.
• To sell and deliver, hospitality, leisure and businesses, and entertainment related services all over the world.
• To build an online travel portal for selling and distribution of travel products including but not limited to airline tickets, Hotel Bookings and car rentals on the internet to sub-agents and end customer all over the world.
• To carry on in India or abroad the businesses of tourists and travel agents, transport agents, contractors freight and passage brokers and representative of airlines, overseas travel agents and tour operators, steamship lines, railways and other carriers whether Indian or foreign, to arrange and operate tours, to facilitate, traveling by land, air, sea and to provide for tourists and travelers provisions of conveniences of all kind by way of issuance of rail/air/sea Tickets, sleeping cars and berths, reserved places
•  At as IATA Agents, passenger sales Agents, sub agents and agents for airlines companies and shipping companies, clearing Agents, forwarding agents, shipping agents, charter party contractors, custom house agents, loading and uploading agents act as consulting and advisors for airline, shipping companies railways, road transport companies and such other Organization in India and abroad
• To carry on the business of transportation including operating buses and trucks from various places and other mode of transportation.”

Subsidiaries of TBO TEK LIMITED:

• Direct subsidiaries
  • TBO Cargo Private Limited (“TBO Cargo”) 
  • Tek Travels DMCC 
• In Direct subsidiaries
  • TBO Holidays Europe B.V. (“TBO Holidays”)
  • TBO Holidays Brasil Agencia De Viagens E Reservas Ltda. (“TBO Brasil”) 
  • TBO Holidays Hong-Kong Limited (“TBO HongKong”) 
  • TBO Holidays Pte. Ltd. (“TBO Singapore”) 
  • TBO Holidays Malaysia Sdn. Bhd. (“TBO Malaysia”) 
  • Travel Boutique Online S.A. De C.V. (“Travel Boutique”) 
  • TBO Technology Services DMCC. (“TBO Technology DMCC”) 
  • TBO Technology Consulting Shanghai Co., Ltd. (“TBO Shanghai”) 
  • Tek Travels Arabia Company for Travel and Tourism (“Tek Travels Arabia”) 
  • TBO LLC 
  • TBO Tek Ireland Limited (“TBO Ireland”) 
  • United Experts for Information Systems Technology Co. LLC (“United Experts”) 
  •  BookaBed AG (“Bookabed”) 
  • Jumbonline Accommodations & Services S.L.U. (“Jumbo”)

The Promoters of  TBO TEK LIMITED:

• Ankush Nijhawan
• Gaurav Bhatnagar
• Manish Dhingra
• Arjun Nijhawan
• LAP Travel Private Limited;

Overview TBO TEK LIMITED:

Our business solutions aim to solve problems of discovery, reliability, transactions, and service by aggregating global travel supply and global travel demand on one platform and by enabling Buyers and Suppliers to transact seamlessly.

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Key Offerings 

• Hotels 
• Air booking
• Packages (Holiday packages)
• Car Rental
• Transfers 
• Sightseeing (Recommendations)
• Cruise
• Cargo 
• Marine
• Insurance
• Eurorail
• TBO Academy
• TBO+ (Reward program)
• ZamZam and Kizan: Our product offering, ZamZam focuses on religious travel in the Kingdom of Saudi Arabia and has an online portal for completing the full process of Umrah booking including Umrah packages, hotels, flights transfers, visa assistance, accommodation, ground arrangements and other services
• Paxes: Paxes is a web and mobile based platform for corporates and TMCs to manage business travel globally
• Travel Partner Solution : The Travel Partner Solution (“TPS”) enables our partners such as loyalty platforms in selling travel products globally without investing in technology
• Roamer Application: Roamer is a personal e-planner for trip management.

Strengths of TBO TEK LIMITED:

 Platform creating network effect with interlinked flywheels to enhance value proposition for partners

Strong operational leverage

• High buyers retention and increased wallet share
• Global network effects leading transaction growth out pacing growth 
• Zero marginal cost of new servicing transaction because of technology automation

The table below provides our region-wise revenue from operations as a percentage of our revenue from operations for Fiscal 2021, 2022 and 2023

Region	Fiscal
	2021		2022		2023
	Revenue from operation (₹ million)	Percentage of revenue from operations (%)	Revenue from operation (₹ million)	Percentage of revenue from operations (%)	Revenue from operation (₹ million)	Percentage ofrevenue from operations (%)
India	967.49	68.23	2,247.79	46.51	3,983.87	37.42
Middle East and Africa	247.02	17.42	1,299.66	26.89	3,404.11	31.98
Europe	52.17	3.68	366.57	7.59	1,467.01	13.78
Latin Arkade Developers IPO: A Risky Bet? America	46.81	3.30	412.45	8.53	938.64	8.82
North America	36.82	2.60	317.91	6.58	506.87	4.76
Asia Pacific	67.74	4.78	188.30	3.90	345.37	3.24
Total	1,418.06	100.00	4,832.68	100.00	10,645.87	100.00

Financial Performance of peers and TBO TEK LIMITED

CAPITALISATION STATEMENT of TBO TEK LIMITED

(In ₹ million, unless otherwise stated)

TBO Tek Limited IPO Details:

TBO Tek’s IPO is set to open for bidding on May 8, 2024 and will close on May 10, 2024. Here’s a quick breakdown of the key details:

• Price Band: ₹875 – ₹920 per share
• Issue Size: ₹1,550.81 Crore
• Fresh Issue: ₹400.00 Crore
• Offer for Sale (OFS): ₹1,150.81 Crore
• Listing Exchange: BSE, NSE
• Lot Size: 16 Shares

• Growth and platform strengthening: They plan to use the funds to expand their network of buyers and suppliers, which could involve things like adding new travel agents or attracting more hotels and travel service providers to their platform. This would allow them to offer a wider range of travel options to their customers.
• Unidentified inorganic acquisitions: The company might also use the money for strategic acquisitions of other businesses in the travel industry. This could help them expand their market share or enter new markets.
• General corporate purposes: IPO proceeds can also be used for a variety of other business needs, such as research and development, marketing initiatives, or working capital.

LITIGATIONS INVOLVING THE DIRECTORS/ PROMOTERS OF THE COMPANY

• Criminal proceedings
  •  As of the date of this Red Herring Prospectus, there are 78 complaints initiated by our Company against different parties for alleged violation of Section 138 read with Sections 141 and 142 of the Negotiable Instruments Act, 1881 (“NI Act”) for dishonour of cheques.

• Material civil litigation
  • Our Company has filed a suit in 2021 before the High Court of Delhi against certain individuals, namely, Gursahib Singh Sethi, Harmeet Kaur and Sahibji Travels and Tours Private Limited (collectively, the “Defendants”), praying that decrees for sale of mortgaged property be passed against the Defendants for recovery of amounts due to our Company. Gurusahib Singh Sethi through his travel agency, Sahibji Travels and Tours Private Limited, had availed services amounting to ₹ 52.13 million from our Company. Thereafter, Gurusahib Singh Sethi, by way of simple mortgage on property owned by Harmeet Kaur, secured our Company’s interest up to ₹ 30.00 million, and thereafter executed a personal guarantee in favour of our Company for the sum of ₹ 50.51 million. The aggregate amount involved in such proceedings is approximately ₹ 48.47 million. The matter is currently pending

Important: Clearly state this is not financial advice and readers should do their own research before investing.

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