Travel Food Services IPO kicks off today: Should you subscribe to it?

The initial public offering (IPO) of Travel Food Services kicks-off for subscription today, that is, Monday, July 07. The company is selling its shares in the range of Rs 1,045-1,100 apiece. Investors can apply for a minimum of 13 equity shares and its multiples thereafter. The issue will close for bidding on Wednesday, July 09.

The IPO of Travel Foods Services is entirely an offer-for-sale (OFS) of up to 1,81,81,818 equity shares amounting to Rs 2,000 crore by Kapur Family Trust. The company will not receive any proceeds from the issue. Incorporated in 2007, Travel Food Services is an Indian airport travel quick service restaurant (Travel QSR) and lounge (Lounge).

Travel Foods Services’ F&B brand portfolio, comprising 117 partner and in-house brands, is in the operation of 397 Travel QSRs across India and Malaysia, as of June 30, 2024. The Mumbai-based company’s Travel QSR and Lounge businesses are present in 14 airports in India and three airports in Malaysia, as of June 30, 2024.

Travel Food Services raised Rs 599 crore from 33 anchor investors as it allocated 54,43,635 equity shares at Rs 1,100 apiece. Its anchor book included names like Abu Dhabi Investment Authority, Axis Mutual Fund, Fidelity Investment Trust, Government Pension Fund Global, Whiteoak Capital, Ikigai Emerging Equity Funds, Turnaround Opportunities Fund and more.

For the financial year ended on March 31, 2025, Travel Food Services reported a net profit of Rs 379.66 crore, with a revenue of Rs 1,762.71 crore. The company clocked a net profit at Rs 298.12 crore with a revenue of Rs 1,462.40 in the financial year 2023-24. The company shall command a total market capitalization of Rs 14,485 crore.

The company has reserved shares worth Rs 4.4 crore for its eligible employees, who will get a discount of Rs 104 in the IPO. Of the net offer, 50 per cent shares shall be reserved for qualified institutional bidders, while non-institutional investors (NIIs) will have 15 per cent for the allocation. Retail investors will have 35 per cent of allocation in the IPO.

Kotak Mahindra Capital Company is the book-running lead manager of the Travel Food Services IPO, while MUFG Intime India (Link Intime) is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with Monday, July 14 as the tentative date of listing. Here’s what a host of brokerage firms said about the IPO of Travel Food Services:
 

SBI Securities
Rating: Subscribe

TFS is a proxy to the Indian aviation growth story. It has a strong presence across all the major airport terminals across India as well as concession wins at both the upcoming new airports at Greater Noida and Navi Mumbai. The brand portfolio has a healthy mix of third party and in-house QSR brands, said SBI Securities.

“At the upper price band of Rs 1,100, the stock is likely to trade at 39.9x FY25 EPS which is at a discount to listed QSR companies. TFS has superior margins and return ratios along with a strong balance sheet. We recommend investors to ‘subscribe’ to the issue at the cut-off price,” it added.
 

Arihant Capital Markets
Rating: Subscribe

With market leadership in airport QSRs and Lounges, a diversified brand portfolio, and proven operational expertise, the company is well positioned to benefit from India’s underpenetrated air travel market and strong highway QSR growth, said Arihant Capital Markets.

“Ongoing expansion in domestic and international airports, along with digital initiatives to boost like-for-like sales, should drive sustained double-digit revenue growth. The issue is valued at a P/E ratio of 38.15 times, based on FY25 EPS of Rs 28.83 per share. We are recommending a ‘subscribe’ rating for this issue,” it added.
 

BP Equities
Rating: Subscribe

With a proven track record, strategic locations, and adaptable formats, the company offers long-term growth opportunities aligned with India’s aviation growth trajectory, said BP Equities. “The issue is valued at a P/E of 39.9 times, based on FY25 earnings, which represents a discount to listed QSR companies. Therefore, we recommend a ‘subscribe’ rating for the issue,” it said.
 

Canara Bank Securities
Rating: Subscribe

Travel Food Services has created a significant competitive moat in the airport-centric QSR and lounge business, supported by global partnerships, strong brand equity, and a wide network across high-traffic travel hubs. Its unique airport-focused model benefits from long-term contracts, operational complexity, and regulatory barriers that deter new entrants, said Canara Bank Securities.

“From a valuation standpoint, the IPO is priced attractively, placed below the sector average of and trades lower than the peer average in terms of price-to-book value (P/BV). Given its strong growth trajectory, first-mover advantage, and resilient business model in a niche, high-growth segment, we recommend a ‘subscribe’ rating for both listing gains and long-term investment,” it said.
 

Ventura Securities
Rating: Subscribe

TFS operates a balanced mix of in-house, regional, and international QSRs, with 37 in-house brands, 32 international brands, and 58 regional brands. The split in revenue generation between lounges and QSRs is 52 per cent and 48 per cent, respectively, said Ventura Securities.

“TFS’s primary operational costs include manpower and food, which are significant components of its expense structure. These costs play a key role in maintaining the company’s service delivery across its operations. TFS is also expanding opportunities in expressway travel QSRs,” it said ‘subscribe’ rating.