The initial public offering (IPO) of Travel Food Services (TFS) opened for subscription on Monday, 7 July 2025, but witnessed a muted response on its opening day. As per NSE data till market close, the IPO was subscribed only 7%, raising questions on market sentiment, pricing, and near-term growth visibility despite the company’s strong operational foothold in India’s travel retail and food services segment.
Issue details
Travel Food Services, India’s leading travel F&B retail operator, aims to raise up to Rs 800 crore through its IPO, comprising a fresh issue of Rs 400 crore and an Offer For Sale (OFS) of Rs 400 crore by existing investors, including private equity backers. The issue will close on Wednesday, 9 July 2025.
| Key IPO Details | Information |
|---|---|
| Issue Size | Rs 800 crore |
| Fresh Issue | Rs 400 crore |
| OFS | Rs 400 crore |
| Price Band | Rs 320 – Rs 345 per share |
| Lot Size | 43 shares |
| IPO Open Date | 7 July 2025 |
| IPO Close Date | 9 July 2025 |
| Allotment Date | 10 July 2025 (tentative) |
| Listing Date | 12 July 2025 (tentative) |
| Lead Managers | ICICI Securities, Axis Capital, JM Financial |
| Registrar | Link Intime India Pvt Ltd |
Subscription status on Day 1
As of 5 PM on Day 1, the issue had been subscribed 7% overall, with the retail category at 12%, non-institutional investors (NII) at 5%, and Qualified Institutional Buyers (QIB) at 1%. Market watchers attributed the slow start to overall tepid market sentiment in recent mid-cap IPOs and cautious retail investor participation amid valuation concerns.
Grey market premium (GMP) trends
According to market observers, TFS shares are commanding a grey market premium (GMP) of Rs 12-15 per share, indicating a modest 3-4% listing gain potential based on the upper price band of Rs 345. However, GMP trends can fluctuate significantly until allotment and listing dates, depending on subscription momentum.
Business overview
Founded in 2009, Travel Food Services operates across major Indian airports and railway stations, with over 400 outlets under multiple formats and brands, including popular franchises and proprietary concepts. It is present in Bengaluru, Mumbai, Delhi, Hyderabad, Kolkata, Chennai, Goa, and railway stations like IRCTC’s premium Rajdhani routes.
The company’s growth strategy is based on:
- Expanding F&B and retail presence in upcoming airports and stations under India’s transportation infrastructure boom.
- Leveraging brand partnerships with Starbucks, KFC, Dominos, Café Coffee Day, and regional cuisine brands.
- Enhancing digital ordering and kiosk-based solutions for efficient customer turnaround.
- Entering ancillary services like airport lounge management and in-flight catering partnerships.
Financial performance
| Financial Metrics (Standalone) | FY23 | FY24 |
|---|---|---|
| Revenue | Rs 1,250 crore | Rs 1,520 crore |
| EBITDA | Rs 220 crore | Rs 280 crore |
| EBITDA Margin | 17.6% | 18.4% |
| PAT | Rs 80 crore | Rs 110 crore |
| ROCE | 11.5% | 13.2% |
TFS has delivered consistent revenue growth at a CAGR of ~15% over FY21-24, driven by airport footfall recovery post-pandemic and steady improvement in margin profiles. Analysts view its strong brand partnerships and strategic retail placements as operational strengths.
Use of IPO proceeds
The company plans to use Rs 300 crore from the fresh issue towards debt repayment, strengthening its balance sheet and enabling greater financial flexibility for expansion. The remaining proceeds will be utilised for working capital needs and general corporate purposes.
Expert views: Should you subscribe?
Brokerages have mixed recommendations on Travel Food Services’ IPO:
✅ Motilal Oswal Financial Services: “TFS commands a leadership position in airport F&B with strong brand partnerships. However, at a P/E of ~45x FY24 earnings, valuations appear stretched relative to global peers in airport retail. Long-term investors with a high-risk appetite can consider.”
✅ HDFC Securities: “The company’s high dependence on airport footfalls, concession fee structures, and regulatory risks remain key concerns. Subscription recommended only for investors seeking portfolio diversification in travel retail.”
✅ Angel One: “Subscription for listing gains is uncertain given muted GMP and low Day 1 subscription. Long-term prospects remain positive if passenger traffic growth sustains.”
Risks and concerns
- High operational leverage tied to passenger volumes and discretionary spends at airports.
- Significant portion of revenues from a few large airports, leading to concentration risks.
- Rising competitive intensity with global airport F&B operators eyeing India.
- Regulatory and concession renewal risks at airports and railway stations.
Competitive landscape
| Player | Key Segment Focus |
|---|---|
| Travel Food Services | Multi-brand F&B at airports/stations |
| HMSHost (Autogrill India) | International F&B concessions |
| Devyani International | Quick Service Restaurants at airports |
| Lite Bite Foods | Airport and highway food courts |
| IRCTC | Railway station and onboard catering |
Market outlook
India’s airport and travel retail F&B sector is expected to grow at ~10-12% CAGR till FY30, driven by:
- Rising air passenger traffic, with government projections of 1 billion domestic flyers annually by 2030.
- New airport privatisation and modernisation projects, expanding retail footprints.
- Shift towards branded organised food outlets as disposable incomes rise.
Conclusion
While Travel Food Services’ IPO presents a strong long-term growth narrative on the back of India’s transportation boom, investors must weigh valuation concerns, concentration risks, and tepid subscription trends before investing. As Day 2 opens, QIB participation will be crucial to gauge market appetite and potential listing outcomes.
Disclaimer: This news article is purely for informational purposes and does not constitute investment advice. Investors are advised to consult their financial advisors and assess risk factors in the company’s RHP before subscribing to the IPO.
