LGT Business Connextions Makes Poor Debut with 24% Discount, Falling Short of Market Expectations

LGT Business Connextions Limited, the travel and tourism service aggregator, made a poor debut on BSE SME on August 26, 2025. After closing its IPO bidding between August 19-21, 2025, the company commenced trading with a significant 24% discount at ₹81.35, falling well short of market expectations and reflecting weak investor confidence in the travel and tourism sector.

 LGT Business Connextions Listing Details

LGT Business Connextions Limited launched its IPO at ₹107 per share with a minimum investment of 2,400 shares costing ₹2,56,800. The IPO received a lukewarm response with a subscription of only 1.25 times - individual investors at 1.75 times and NII at 0.75 times, indicating weak investor interest across categories in the travel services business.

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 First-Day Trading Performance Outlook

Listing Price: The LGT Business Connextions share price opened at ₹81.35 on BSE SME, representing a discount of 24% from the issue price of ₹107, delivering significant losses for investors and falling well short of market expectations.

 Growth Drivers and Challenges

Growth Drivers:

Steady Financial Performance: Revenue increased by 13% to ₹100.81 crore in FY25 with PAT rising by 44% to ₹5.22 crore, reflecting recovery in travel demand post-pandemic and operational efficiency improvements.

Comprehensive Service Portfolio: Offers extensive travel services including MICE travel, cruise bookings, hotel accommodations, ticketing, visa processing, and customized travel plans for both corporate and individual clients.

Strong Financial Metrics: Outstanding ROE of 41.89%, impressive ROCE of 45.19%, healthy PAT margin of 5.19%, and solid EBITDA margin of 7.62% indicating operational efficiency.

IATA Accreditation: IATA accredited ticketing services providing credibility and commission-based revenue streams for domestic and international bookings.

Challenges:

Poor Market Reception: Significant discount at listing despite modest subscription indicates investor concerns about business prospects in the competitive travel services market.

High Debt Burden: Debt-to-equity ratio of 0.77 with total borrowings of ₹9.58 crore creating financial leverage concerns affecting cash flow generation capabilities.

Competitive Industry Environment: Operating in highly competitive and fragmented travel services sector with pricing pressures and margin compression challenges.

Small Scale Operations: Relatively small revenue base of ₹100.81 crore potentially restricting competitive positioning against larger travel service providers.

 Utilisation of IPO Proceeds

Capital Expenditure: ₹10.44 crore for capital expenditure requirements enhancing operational infrastructure and service capabilities in the travel sector.

Working Capital Requirements: ₹7.70 crore for funding working capital needs supporting business operations and service delivery.

General Corporate Purposes: ₹3.79 crore for general corporate purposes supporting business operations and strategic initiatives.

 Financial Performance of LGT Business Connextions

Revenue: ₹100.81 crore for FY25, showing growth of 13% from ₹89.53 crore in FY24, reflecting recovery in travel demand and business expansion efforts.

Net Profit: ₹5.22 crore in FY25, representing growth of 44% from ₹3.63 crore in FY24, indicating improved operational efficiency and margin management.

Financial Metrics: Exceptional ROE of 41.89%, impressive ROCE of 45.19%, debt-to-equity ratio of 0.77, strong RoNW of 41.89%, healthy PAT margin of 5.19%, solid EBITDA margin of 7.62%, Price to Book Value of 6.02, and market capitalisation of ₹100.29 crore.