Introduction
The IPO season in India continues to
buzz, and one of the latest names making headlines is Travel Food Services
(TFS). Known for its presence in major airport terminals across the
country, the company has launched its Initial Public Offering (IPO) with
the aim to raise ₹2,000 crore.
But with only hours left before the
IPO closes, many retail and non-institutional investors are wondering:
"Should you subscribe Travel Food Services IPO before it closes?"
This detailed guide will help you
answer that question with facts, expert-like opinions, easy explanations, and a
friendly tone.
1.
Travel Food Services: Who They Are
Travel Food Services (TFS) is one of India's largest operators of food and beverage
outlets and airport lounges. The company provides food options such as cafes,
kiosks, restaurants, and lounges at 14 major Indian airports.
TFS has also expanded its services
internationally in places like Malaysia and Hong Kong. With exclusive
contracts, popular food brands (both global and in-house), and lounges that
offer premium airport services, TFS has carved a unique position in the travel
ecosystem.
2. Travel Food Services IPO: Quick Snapshot
| Feature | Details |
|---|---|
| Issue Size | ₹2,000 crore (pure OFS) |
| IPO Type | Offer For Sale (no fresh issue) |
| Price Band | ₹1,045 to ₹1,100 per share |
| Lot Size (Retail) | 13 shares |
| Minimum Investment (Retail) | ₹13,585 |
| Lot Size (Small NII) | 182 shares (14 lots) |
| Minimum Investment (sNII) | ₹2,00,200 |
| Lot Size (Big NII) | 910 shares (70 lots) |
| Minimum Investment (bNII) | ₹10,01,000 |
| Employee Reservation | 40,382 shares (₹104 discount) |
| Bidding Dates | July 7 to July 9, 2025 |
| Listing Date (Expected) | July 14, 2025 |
| Stock Exchanges | BSE and NSE |
3.
What Makes This IPO Different?
Unlike some IPOs which offer new
shares to raise capital for expansion or to repay debt, the TFS IPO is
purely an Offer for Sale (OFS). This means existing shareholders are
selling their stake and the company itself will not receive any new capital
from this IPO.
However, this structure also
suggests that the promoters believe the current valuation is attractive enough
to offload their shares, which could mean strong fundamentals and high investor
interest.
4.
Analyst Views: Should You Subscribe?
Many analysts and brokerage houses
have shared their views on the Travel Food Services IPO. Here’s a simplified
summary of what most of them are saying:
Positive Factors
- Strong Airport Presence: TFS operates across top-tier airports in India, where
footfall is high and revenue potential is significant.
- First Mover Advantage:
It is among the very few organised players in the airport F&B (Food
& Beverage) and lounge service market.
- Diversified Brand Portfolio: TFS has partnered with both Indian and international
food chains, offering a wide range of dining options to travelers.
- Growing Sector:
As air travel grows rapidly in India, the demand for food and services at
airports will also increase, benefitting TFS.
- Strong Profit Margins:
The company enjoys high EBITDA margins (around 30–35%) due to its premium
pricing and captive customer base.
- Healthy Financials:
Revenue and profit after tax (PAT) have seen strong year-on-year growth.
The company is also debt-free.
Concerns Raised
- High Valuation:
The stock is priced at a Price-to-Earnings (P/E) ratio of around 38x based
on FY25 estimated earnings, which some feel is slightly expensive.
- OFS Structure:
Since the company will not get any fresh funds, expansion and future
investments will rely on internal accruals or future borrowings.
- Airport Dependency:
A significant portion of revenue comes from only a few major airports.
This makes the company vulnerable if contract renewals are delayed or
lost.
- Limited Listing Gain Potential: Grey Market Premium (GMP) trends show a drop in
premium as the IPO closing date nears.
5.
Grey Market Premium (GMP) Trends
Initially, the GMP for TFS IPO was
as high as ₹90–₹100, indicating strong interest and a potential listing gain of
over 8–10%. However, closer to the IPO closing date, the GMP has dropped to ₹7,
suggesting that the listing may offer only marginal gains.
What
does this mean?
- If you are looking for short-term gains, this
might not be the best IPO to jump into.
- If your goal is long-term investment, then
fundamentals matter more than GMP.
6.
Should You Subscribe Travel Food Services IPO Before It Closes?
This is the million-rupee question!
Let’s look at two scenarios:
You SHOULD Subscribe IF:
- You are a long-term investor who believes in
India's aviation growth story.
- You trust in brand-led businesses with captive
audiences (airports).
- You are okay with moderate valuations and have a risk
appetite.
- You like companies with consistent margins and
growing revenue.
You SHOULD AVOID IF:
- You are expecting quick listing gains of 10% or
more.
- You are not comfortable with valuation at the upper
band.
- You are not confident about airport dependency and
contract renewals.
- You prefer IPOs with fresh issues where money is
used for company growth.
7.
Long-Term Investment Potential
TFS has all the ingredients of a
strong long-term player:
- Increasing air passenger traffic in India
- Entry into new airports (like Navi Mumbai and Jewar
Airport in Noida)
- Brand partnerships that boost revenue
- Lounge business gaining popularity
If you are investing for 3–5 years,
this IPO might be a smart addition to your portfolio.
8.
Financial Performance Highlights
| Metric | FY23 | FY24 (Estimate) |
|---|---|---|
| Revenue | ₹1,400 Cr | ₹1,687 Cr |
| Profit After Tax (PAT) | ₹280 Cr | ₹380 Cr |
| EBITDA Margin | 31% | 33–35% |
| ROE | 35% | 38–40% |
| Debt | ₹0 (Net Cash) | ₹375 Cr |
These numbers show that TFS is not
just about growth, but also about solid profitability and financial discipline.
9.
IPO Subscription Strategy for Retail Investors
Here’s how to go about it:
- Apply Early:
Subscriptions usually get filled quickly. Early bids are processed faster.
- Bid at Cut-Off Price:
This increases your chances of allotment.
- Track GMP:
While not the only indicator, GMP helps assess listing expectations.
- Apply Through UPI or ASBA: Use a verified UPI ID or bank account linked with
your PAN.
- Monitor Allotment Status: The allotment will be finalised by July 10, 2025.
10.
Final Verdict
So, coming back to our main
question:
Should you subscribe Travel Food Services IPO before it closes?
Our
Answer:
Yes, if you are in it for the long haul.
Maybe not, if your focus is on listing day profits alone.
This IPO presents a solid company
with long-term potential in a growing segment. But like any investment, it
comes with its own set of risks. Know your goals and make a decision that suits
your style.
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