Travel Food Services IPO Opens on July 7: 10 Key Things to Know from RHP Before You Invest

Travel Food Services Ltd (TFS), India’s largest travel-focused food and beverage (F&B) operator, is set to launch its much-anticipated Initial Public Offering (IPO) on July 7, 2025. Backed by private equity major KKR, the IPO aims to strengthen the company’s market position amid the post-pandemic travel revival. Here's a deep dive into 10 key insights from the company’s Red Herring Prospectus (RHP) that potential investors must know before subscribing.

1. IPO Details: Fresh Issue and OFS Components

The TFS IPO comprises a fresh issue of ₹400 crore and an Offer for Sale (OFS) of up to 1.6 crore equity shares by existing shareholders, including KKR and select promoters. The price band and lot size are expected to be announced shortly.

2. Strong Backing from KKR

Global investment firm KKR is currently the largest shareholder in TFS, holding a majority stake since its initial investment in 2016. The IPO will see KKR partially exiting, which analysts view as a typical strategic move. KKR’s continued stake post-listing could provide long-term stability and global governance standards to the company.

3. Dominant Market Presence in Travel Hubs

According to the RHP, TFS operates over 360 outlets across six airports, 42 railway stations, and other travel destinations in India. The company also runs lounges, restaurants, and kiosks in strategic high-footfall areas. Its portfolio includes renowned brands like Caféccino, Curry Kitchen, Dilli Streat, and international franchise tie-ups like Domino’s and KFC.

4. Financial Performance and Growth

For FY24, TFS posted a revenue of ₹1,062 crore, marking a significant growth from ₹765 crore in FY23, reflecting a robust recovery in travel post-COVID. The net profit for FY24 stood at ₹83 crore compared to ₹24 crore in FY23. Its EBITDA margin improved to 18.6% in FY24, indicating better operational efficiency.

“The company’s financial rebound is impressive, especially with increasing passenger traffic and strong average transaction values,” says Ritesh Bhansali, retail analyst at Mehta Equities.

5. Use of IPO Proceeds

The ₹400 crore from the fresh issue will primarily be used for:

• Repayment of debt (₹150 crore)

• Expansion of new outlets and formats (₹170 crore)

• General corporate purposes

This strategic deployment is expected to improve the debt-to-equity ratio and fund the next leg of growth.

6. Focus on Digital and Tech Integration

TFS has significantly invested in digital ordering platforms, self-checkout kiosks, and data analytics tools to enhance customer experience and increase throughput in high-traffic locations. The RHP notes that 25% of transactions are now digital, signaling a modernized operating environment.

7. Sector Outlook: Travel and F&B Rebound

The Indian F&B market at travel hubs is expected to grow at a CAGR of 12.5% over the next 5 years, supported by rising disposable incomes, increased domestic air travel, and improved rail infrastructure. TFS, with its strong foothold and brand equity, is well-positioned to benefit from this structural tailwind.

8. Competitive Landscape

TFS competes with other organized players such as Devyani International (franchisee of Yum Brands) and Lite Bite Foods. However, its exclusive rights at key airports and multi-format F&B offerings provide a competitive moat.

“TFS’s first-mover advantage and long-term airport contracts are key strengths that limit competition in its niche segment,” says Vinay Bhargava, IPO strategist at CapitalVia Global Research.

9. Risk Factors Highlighted in RHP

Investors should note several risk factors:

• Concentration Risk: A large share of revenue is derived from a few key airports.

• Dependency on Travel Industry: Any macro or geopolitical disruption affecting travel can impact earnings.

• Contract Renewals: The business model is reliant on the timely renewal of long-term contracts at transportation hubs.

10. Valuation and Investor Outlook

Though final valuation details will emerge closer to the listing, early estimates suggest a P/E multiple of 35–40x FY24 earnings, comparable to other premium QSR and hospitality players. Market sentiment remains cautiously optimistic.

“Given the post-COVID travel boom, brand visibility, and robust financials, TFS IPO may attract both institutional and retail investors,” notes Sneha Naik, Fund Manager, Samco Mutual Fund. “However, valuations appear rich, and investors must weigh long-term growth against current pricing.”

Travel Food Services’ upcoming IPO is riding on the twin engines of rising travel demand and its dominant position in travel-centric F&B. While the company’s growth trajectory, diversified presence, and digital push are appealing, investors must balance enthusiasm with due diligence, especially in a volatile secondary market.

The IPO opens for subscription on July 7 and closes on July 9, with listing likely on both NSE and BSE by mid-July.