Travel Food Services IPO: Should You Subscribe?

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The initial public offering (IPO) of Travel Food Services Ltd (TFSL) opened for subscription on Tuesday, July 7, and will close on Thursday, July 9, 2025. The grey market premium (GMP) for the IPO is hovering around Rs 16, indicating a 1.5% premium.

Investors are advised to carefully consider both the opportunities and risks before subscribing. For a detailed review, see our comprehensive IPO analysis here.

Travel Food Services IPO Details

  • Issue Details: Mainstream
  • Offer for Sale: Rs 2,000 crore
  • Price Band: Rs 1,045 – Rs 1,100
  • Lot Size: 13 shares
  • Listing Date: July 14, 2025

Overview of Travel Food Services Ltd

TFSL is a leading player in India's fast-growing airport travel quick service restaurant (Travel QSR) and lounge (Lounge) sectors. Its Travel QSR business offers a diverse range of curated food and beverage (F&B) concepts across multiple cuisines, brands, and formats. The Lounge business provides exclusive areas in airport terminals, accessible to first and business class passengers, loyalty programme members, and select credit card holders.

As of March 31, 2025, TFSL operates the largest network of Travel QSR outlets in India, with 384 of its 413 outlets at airports and the rest along highways. It also leads the country in private airport lounges, with 28 lounges across 10 airports.

Travel Food Services Key Strengths

  • Market Leadership: TFSL is a dominant player in the Travel QSR and Lounge sectors at Indian airports. As of March 31, 2025, it operated the largest network of Travel QSR outlets and private lounges in India. The firm holds a ~26% market share in the Travel QSR sector by revenue and ~45% market share in the airport lounge sector in India in FY25.
  • Long-Term Relationships: TFSL has built strong, long-term partnerships with airport operators including 15 years at Delhi, 16 years at Mumbai, 6 years at Bengaluru and 11 years at Chennai and Kolkata airports. Additionally, it has been the sole F&B concessionaire and lounge operator at Chennai and Kolkata Airports since 2014.
  • Strong Financial Performance: TFSL has demonstrated impressive growth, achieving a compound annual growth rate (CAGR) of 26% in operating revenue, 22% in EBITDA and 23% in net profit from FY23 to FY25.
  • Robust Return Ratios: TFSL boasts strong return metrics, with a Return on Equity (RoE) of 35.47% and Return on Capital Employed (RoCE) of 51.40% as of FY25.
  • Margin Improvement: TFSL reported an EBITDA margin of 40.07% and a net profit margin of 21.54% in FY25, up from 39.39% and 20.39%, respectively—well above its listed peers.

Travel Food Services Risk Factors

  • Revenue Concentration: In FY25, ~95% of TFSL’s revenue from operations came from its Travel QSRs and Lounges located in airports. The firm’s business is heavily reliant on concession agreements. Any inability to renew existing agreements or failure to secure new concessions could negatively impact its business and operational results.
  • Dependence on Key Airports: The top 5 airports accounted for ~86% of TFSL’s revenues in FY25. A decline in passenger traffic at these airports could significantly impact the company’s revenue.
  • Lounge Business Exposure: TFSL’s business may face challenges if it is unable to retain its existing lounge partners or attract new ones, as the lounge business contributed 44.9% of the company's revenue in FY25.
  • Legal Risks: TFSL is facing ongoing legal matters totalling Rs 114 crore and any unfavourable legal outcomes could negatively affect its financial position.
  • Contingent Liabilities: As of March 31, 2025, TFSL reported contingent liabilities of Rs 273 crore, which, if materialized, could adversely affect its financial position.

Final Thoughts: Should You Subscribe to Travel Food Services Ltd’s IPO? 

TFSL boasts a solid financial track record, supported by a strong balance sheet (zero debt) and exceptional capital efficiency (Return on Net Worth of ~35%).

In terms of valuation, the IPO commands a P/E multiple of 40x based on FY25 earnings, which is significantly lower than its listed peers.

With its strong track record, strategic locations, and adaptable formats, TFSL is well-positioned to capitalize on the long-term growth of India's aviation sector. Given these factors, investors may consider subscribing to the IPO from a long-term perspective.

For a deep dive into other IPOs, explore: IPO Corner on Liquide