Travel Food Services IPO Listing: What Grey Market Premium Signals Ahead of Market Debut on BSE, NSE
Travel Food Services IPO is set to list on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) today, Monday, July 14. The grey market premium (GMP) of the IPO signals a flat listing or a marginal gain on the bourses. In this article, we will dive into the details of the IPO, its subscription status, and what the GMP signals for investors.
According to market observers, unlisted shares of Travel Food Services Ltd are currently trading at Rs 1,125 against its upper IPO price of Rs 1,100. This means a grey market premium or GMP of Rs 25, which is 2.27% over its issue price, indicating a marginal gain listing.
The GMP is based on market sentiments and keeps changing. ‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Travel Food Services IPO received an overall subscription of 2.88 times at the end of the three-day subscription window closing. The strongest response came from Qualified Institutional Buyers (QIBs), who subscribed their portion 7.70 times. The Non-Institutional Investors (NIIs) category was subscribed 1.58 times. On the other hand, the Retail Individual Investors (RIIs) portion saw weaker demand, with only 0.69 times subscription, meaning it did not get fully booked. The employee segment saw a good response, getting subscribed 1.72 times, with most bids also coming in at the cut-off price.
The price band of the mainboard IPO, which aims to raise Rs 2,000 crore, has been fixed in the range of Rs 1,045 to Rs 1,100. The three-day IPO was opened between July 7 and July 9.
Travel Food Services, founded in 2007, operates 397 quick service restaurants (QSRs) and airport lounges across 17 airports in India and Malaysia, with a portfolio of 117 in-house and partner brands. The company’s presence spans 14 airports in India, including major hubs like Delhi, Mumbai, Bengaluru, Hyderabad, Kolkata, and Chennai, as well as three airports in Malaysia, as of June 30, 2024.
According to market observers, the IPO is expected to list at Rs 1,125, which is in line with the grey market premium. The listing gain is expected to be moderate, considering the overall subscription status of the IPO.
Investors should note that the retail investors require a minimum capital of Rs 13,585 to apply for the IPO. Since the IPO is entirely an offer for sale (OFS) of shares worth Rs 2,000 crore by promoter Kapur Family Trust, the company will not receive any funds from the issue. The proceeds will go to the selling shareholder. The IPO has raised nearly Rs 600 crore from anchor investors, days before its IPO opening for public subscription.
Travel Food Services has launched its first travel quick-service restaurant (QSR) outlet in 2009. It is promoted by SSP Group plc (SSP) and its affiliates SSP Group Holdings Ltd, SSP Financing Ltd, SSP Asia Pacific Holdings Ltd, along with the Kapur Family Trust, Varun Kapur, and Karan Kapur. SSP, an FTSE 250 company listed on the London Stock Exchange, is recognized as a global leader in the Travel Food & Beverage (F&B) sector based on revenue in 2024, as per the Crisil report.
The Kapur Family Trust operates under the flagship brand K Hospitality, which oversees and invests in several hospitality and food service businesses, including Travel Food Services (collectively referred to as K Hospitality). The company’s portfolio features a diverse selection of food and beverage (F&B) concepts, including fast food, cafes, bakeries, food courts, and bars, primarily located in airports and some highway locations.
The article concludes that the Travel Food Services IPO is expected to list at Rs 1,125, with a moderate listing gain. Investors should consider the IPO’s subscription status, grey market premium, and overall market trends before making any investment decisions.
