Travel Food Services IPO Lists with 2.38% Premium, Reflects Cautious Investor Sentiment

The travel quick-service restaurant provider, Travel Food Services Limited, made a measured debut on the BSE and NSE on July 14, 2025. After completing its IPO bidding between July 7 - July 9, 2025, the company commenced trading with a modest 2.38% premium to its issue price on BSE and 2.27% on NSE, reflecting cautious investor sentiment despite the company's leadership position in India's airport food and beverage sector.

Travel Food Services Listing Details

Travel Food Services Limited launched its IPO at ₹1,100 per share with minimum investment of 13 shares costing ₹14,300. The IPO received moderate response with subscription of 3.03 times - QIB segment leading at 8.10 times, NII at 1.67 times, whilst retail participation remained subdued at 0.73 times and employee participation at 1.81 times.

Listing Price: The Travel Food Services share price opened at ₹1,126.20 on BSE on July 14, 2025, representing a premium of 2.38% from the issue price of ₹1,100, whilst NSE listing showed ₹1,125 per share with 2.27% premium, delivering moderate gains for investors in line with expectations.

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First-Day Trading Performance Outlook

Travel Food Services delivered restrained debut performance with modest premium reflecting selective investor confidence in airport food service companies with established market positions. The company, incorporated in 2007, operates 397 Travel QSRs across India and Malaysia with comprehensive F&B brand portfolio comprising 117 partner and in-house brands, serving 14 airports in India and three in Malaysia with experienced management supported by synergistic partnerships with SSP and K Hospitality.

Growth Drivers and Challenges

Growth Drivers:

• Expanding Airport Infrastructure: Positioned to benefit from India's rapidly growing aviation sector with increasing passenger traffic and new airport developments driving demand for quality food and beverage services
• Market Leadership Position: Leading player in Travel QSR and Lounge sectors in Indian airports with diversified portfolio of high-quality F&B brands and established presence in major airports
• Strategic Location Advantage: Long-standing presence in premium airports including Delhi (14 years), Mumbai (15 years), Chennai (11 years), and Bengaluru (5 years) ensuring sustained revenue streams
• Strong Financial Performance: Revenue growth of 21% and PAT growth of 27% in FY25 with impressive ROE of 35.47% and healthy EBITDA margin of 40.07% demonstrating operational excellence

Challenges:

• Pure OFS Structure: Entire issue being offer for sale with no fresh capital raising limiting funds available for business expansion and growth initiatives
• Subdued Retail Response: Low retail subscription at 0.73 times indicates limited retail investor confidence in valuation and growth prospects
• High Valuation Concerns: Trading at P/E of 48.6x with Price to Book Value of 18.20 raising questions about sustainability at current premium levels
• Operational Dependency: Business model heavily dependent on airport passenger traffic and travel patterns making it vulnerable to aviation sector fluctuation

Utilisation of IPO Proceeds

• No Fresh Capital: The company will not receive any proceeds from the offer as it is entirely an offer for sale 
• Promoter Divestment: All proceeds of ₹2,000 crore will be received by the Promoter Selling Shareholders 
• Promoter Holding Reduction: Promoter holding will reduce from 100% to 86.19% post-issue 
• Strategic Flexibility: Company maintains flexibility to pursue growth initiatives through internal accruals and debt financing

Financial Performance of Chemkart India

Revenue: ₹1,762.71 crore for FY25, showing robust 21% growth from ₹1,462.40 crore in FY24, reflecting strong recovery in travel sector and operational efficiency.

Net Profit: ₹379.66 crore in FY25, demonstrating impressive 27% growth from ₹298.12 crore in FY24, with consistent profitability growth trajectory over three years.

Financial Metrics: Strong ROE of 35.47%, exceptional ROCE of 51.40%, healthy RoNW of 34.64%, impressive PAT margin of 21.54%, and robust EBITDA margin of 40.07% with minimal debt burden

Travel Food Services represents a niche investment opportunity in the airport food service sector with modest listing performance delivering a 2.38% premium backed by selective institutional interest. Despite concerns over high valuation and pure OFS structure, the company's market leadership position, established airport presence, and strong financial performance provide steady growth potential in India's expanding aviation market, though the restrained listing performance suggests investors are cautious about premium valuations in specialised sectors.