Navigating the landscape of Initial Public Offerings demands a thorough examination of a company’s business model, financial health, and market prospects. For investors guided by Islamic principles, an essential step involves assessing an investment’s adherence to Shariah compliance. Here, we provide an in-depth analysis of the Travel Food Services Ltd. IPO, covering its operations, financial performance, IPO specifics, and, significantly, its Shariah status.
Table of Contents
Crucial Shariah Status
For Muslim investors, aligning investment opportunities with Islamic Shariah principles is a fundamental consideration. Based on the detailed screening, Travel Food Services Ltd. is explicitly categorized as Non-Shariah Compliant.
- The company’s core business is marked as “DOUBTFUL” in the Shariah screening. This is because its business involves multiple segments with mixed revenue streams, and detailed segment-wise data is not fully available for a conclusive assessment. The lounge business, in particular, highlights “a bar with a wide selection of fine wines and top-shelf spirits,” which raises Shariah concerns.
- While its impermissible income to total revenue and interest-bearing debt to total assets ratios pass the screening, and its illiquid assets to total assets ratio also passes.
- However, the company fails Rule 6 due to investments in mutual funds and other bank deposits.
Therefore, for Muslim investors strictly prioritizing Shariah compliance, Travel Food Services Ltd. IPO is not considered a Shariah-compliant investment option due to its business activities and financial investments.
For other investors who are still interested in understanding the operational and financial specifics of this IPO, please proceed further for reading more details. This analysis is provided for all investors.
About Travel Food Services Ltd.: The Architects of Airport Culinary Journeys
Imagine a seamless journey through an airport, where every craving is met, and every moment of waiting is transformed into an experience of comfort and luxury. This is the world Travel Food Services Limited, incorporated in 2007, has meticulously crafted. They stand as a leading player, orchestrating the culinary and lounge landscape across major travel hubs in India and beyond.
- A Vast Network: The company operates the largest network of Travel QSR (Quick Service Restaurant) outlets and airport lounges in India, boasting over 425 Travel QSR outlets and more than 35 airport lounges.
- Global Footprint: As of June 30, 2024, their presence extends across 14 airports in India, including major hubs like Delhi, Mumbai, Bengaluru, Hyderabad, Kolkata, and Chennai, and also in three airports in Malaysia.
- Deep-Rooted Presence: Travel Food Services has cultivated long-standing relationships with airport operators, being present in Delhi airport for 14 years, Mumbai for 15 years, Bengaluru for 5 years, and Chennai for 11 years as of June 30, 2024.
- Curated Culinary Experiences: Their Travel QSR business offers a diverse range of food and beverage concepts, thoughtfully adapted for the speed and convenience demanded by travelers. This includes a portfolio of 117 partner and in-house brands across various cuisines and formats.
- Award-Winning Lounges: The lounge business provides designated, comfortable areas within airport terminals. These are primarily accessible to first and business-class passengers, members of airline loyalty programs, and select credit/debit cardholders. Their lounge concepts have garnered awards, spanning both luxury and premium value segments.
- Understanding the Traveler: A core strength lies in their deep understanding of traveler preferences, consistently focusing on delivering quality customer experiences.
- Synergistic Partnerships: An experienced management team is supported by strategic partnerships with SSP and K Hospitality, enhancing their operational capabilities and market reach.
Travel Food Services Ltd. IPO: Key Details
The Initial Public Offering of Travel Food Services Ltd. is structured as a Bookbuilding IPO. The IPO opens on Monday, July 7, 2025, and is scheduled to close on Wednesday, July 9, 2025. The total issue size is 1,81,81,818 shares, aggregating up to ₹2,000.00 Crores. This is an Offer For Sale, meaning the company itself will not receive proceeds from the offer.
- IPO Open Date: July 7, 2025 (Monday)
- IPO Close Date: July 9, 2025 (Wednesday)
- Face Value: ₹1 per share
- Issue Price Band: ₹1045 to ₹1100 per share
- Lot Size: 13 Shares
- Total Issue Size: 1,81,81,818 shares (aggregating up to ₹2,000.00 Crores)
- Employee Discount: ₹104.00
- Issue Type: Bookbuilding IPO
- Listing At: BSE, NSE
- Tentative Allotment Date: Thursday, July 10, 2025
- Initiation of Refunds: Friday, July 11, 2025
- Credit of Shares to Demat: Friday, July 11, 2025
- Tentative Listing Date: Monday, July 14, 2025
- Cut-off time for UPI mandate confirmation: 5 PM on July 9, 2025
Financial Performance: A Snapshot of Travel Food Services Ltd.
Travel Food Services Limited’s revenue increased by 21% and profit after tax (PAT) rose by 27% between the financial year ending March 31, 2025, and March 31, 2024.
- Assets: Increased from ₹1,332.32 Crores in March 2023 to ₹1,902.73 Crores in March 2025.
- Revenue: Grew from ₹1,103.58 Crores in March 2023 to ₹1,762.71 Crores in March 2025.
- Profit After Tax: Showed consistent improvement, from ₹251.30 Crores in March 2023 to ₹379.66 Crores in March 2025.
- EBITDA: Increased from ₹458.05 Crores in March 2023 to ₹676.35 Crores in March 2025.
- Net Worth: Grew from ₹651.12 Crores in March 2023 to ₹1,048.45 Crores in March 2025.
- Reserves and Surplus: Increased from ₹651.60 Crores to ₹1,040.24 Crores in the same period.
- Total Borrowing: Fluctuated, from ₹31.05 Crores in March 2023 to ₹63.78 Crores in March 2025.
Key Performance Indicator (KPI): Travel Food Services Ltd.
Key Performance Indicators offer insights into Travel Food Services Ltd.’s efficiency and valuation.
- ROE (Return on Equity): 35.47%
- ROCE (Return on Capital Employed): 51.40%
- RoNW (Return on Net Worth): 34.64%
- PAT Margin: 21.54%
- EBITDA Margin: 40.07%
- Price to Book Value: 18.20
Objects of the Issue: Purpose of the IPO Funds
The company will not receive any proceeds from this Offer for Sale. All the Offer Proceeds will be received by the Promoter Selling Shareholder.
Grey Market Premium (GMP)
The Grey Market Premium (GMP) for Travel Food Services IPO is ₹45, which is approximately 4.09% over the issue price. This suggests a potential listing price of ₹1145 (₹1100 upper band + ₹45 GMP). GMP is an unofficial indicator that reflects market sentiment and can fluctuate.
Conclusion and Investor Outlook
Travel Food Services Ltd. is a dominant player in the airport travel QSR and lounge sectors, showcasing a strong network, diversified brand portfolio, and robust financial growth. However, its non-Shariah compliant status, primarily due to aspects of its lounge business (presence of a bar) and investments in non-compliant instruments, is a critical consideration for Muslim investors.
For all investors, a thorough review of the Red Herring Prospectus (RHP) is essential to understand the company’s detailed business model, risk factors, and future strategies. An informed investment decision is always based on comprehensive research aligned with individual investment goals and risk tolerance.
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SEBI Disclaimer: Investment in securities markets are subject to market risks, read all the related documents carefully before investing. The information provided in this article is for educational and informational purposes only and does not constitute financial advice. Investors should consult with qualified financial professionals before making any investment decisions.