Should you subscribe to the Rs 1,551 crore issue :TBO Tek IPO

TBO Tek’s IPO, opening for subscription on May 8, has garnered a “subscribe” rating from various brokerages due to its capital-efficient business model and sustained growth prospects. The issue, totaling Rs 1,550.81 crore, includes a fresh issue of shares worth Rs 400 crore and an offer-for-sale of shares worth Rs 1,150.81 crore. Promoters and investors will be offloading shares through the offer. With a price band set at Rs 875-920 per share, the company plans to utilize the proceeds for expansion, platform strengthening, and potential acquisitions.

Analysts at Swastika Investmart highlight TBO Tek’s robust financial performance post FY21, though they caution about its reliance on a limited supplier range and external industry sensitivity. Despite a seemingly high P/E valuation, they recommend subscribing to the IPO considering the growth potential and listing gains.

Marwadi Financial Services echoes similar sentiments, emphasizing the company’s capital-efficient model and reasonable valuation compared to peers, recommending a “subscribe” rating.

Ventura Securities views TBO Tek as an enabler in the travel ecosystem, facilitating growth for airlines, hotels, and travel agents. They suggest subscribing to the IPO, citing its role in expanding reach and digitizing operations.

Anchor investors, including global and domestic institutions, have already shown interest in TBO Tek. The company’s financials depict healthy growth, with FY23 profits surging by 340% and revenue rising by 120.3%. In the first nine months of FY24, TBO Tek surpassed previous profit figures and recorded substantial revenue growth.