From Air Ticketing to IPO: TBO’s Journey in the Global Travel Distribution Sector

Founded in 2006 by Ankush Nijhawan and Garav Bhatnagar, TBO (Travel Boutique Online) emerged as a response to the changing demands within the B2B travel distribution sector. Initially focused on air ticketing, TBO has since evolved into a comprehensive global travel distribution platform, catering to both buyers and suppliers alike.

Presently, TBO offers a comprehensive array of products spanning air travel, accommodations, rail services, holiday packages, car rentals, transfers, sightseeing tours, cruises, and cargo handling. In addition to these offerings, their in-house platform utilizes advanced technologies such as data analytics, artificial intelligence, and machine learning to generate search result pages. This enhances the visibility and sales of relevant travel products in alignment with user search criteria.

As travel and tourism bounce back strongly, TBO leads the way in bringing new ideas to a market that is set to reach around $2.6 trillion by 2027.

In FY 22–23, the company had a revenue of ₹1023 crore with a PAT of ₹138 crore. It registered a 4X jump in profits during the same period, and revenue from operations also spiked 2.17X from the previous year.

Slowly and steadily, TBO created a niche for itself in the highly competitive space by focusing on its customers and extending its white-label solutions to travel agents and tour operators. By facilitating air travel, hotel bookings, and tour packages, the platform makes money on commissions for these services.

The commission from hotels and packages formed a significant 67.5% of the operating revenue which surged 2.57X to ₹709 crore during FY23. Commission from air ticketing contributed 30.4% of the total collections which grew 65% to ₹320 crore in FY23. The firm also charged annual maintenance fees from its customers and income from this service increased 57.8% to ₹22 crore in FY23.

A substantial part of the company’s revenue comes from the worldwide tourism sector. Any negative influences affecting global tourism will consequently harm TBO’s overall business, financial standing, and profitability. TBO’s business success relies heavily on its connections with suppliers. Any unfavorable alterations in these connections will adversely affect the company’s overall operations.

During a bullish market, it’s common for entrepreneurs to seize the opportunity by initiating an initial Public Offering (IPO) through an offer-for-sale, aiming to capitalize on their investment.

The company filed its draft red herring prospectus (DRHP) in November, seeking to raise ₹400 crore in fresh capital. TBO connects over 147,000 buyers (travel agencies) and suppliers (hotels, airlines, car rentals, and cruises) in more than 100 countries. With the IPO proceeds, the company plans to invest in developing its platform to acquire new clients, primarily targeting mature markets such as Europe and North America.

Reference: entrackr.com | ajuniorvc.com | business-standard.com

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