Travel Food Services shares make tepid debut at 2% premium over IPO price; should you buy, sell or hold?

Travel Food Services IPO shares listed on NSE, BSE on July 14.

Travel Food Services shares made a muted debut on the stock exchanges on Monday, listing at a premium of just over 2 percent against the IPO price.

Travel Food Services stock was listed at Rs 1,125 on the National Stock Exchange, up 2.27 percent from the issue price of Rs 1,100.

On the BSE, it opened at Rs 1,126.20, reflecting a premium of 2.38 percent. Post listing, the company’s market capitalisation stood at Rs 14,829.74 crore.

The Rs 2,000-crore initial public offering (IPO) was open for subscription from July 7 to 9, and was subscribed 2.88 times in the price band of Rs 1,045 to Rs 1,100 per share.

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The listing was largely in line with the grey market expectations, which had projected modest gains of around 2 percent.

Travel Food Services Ltd operates travel quick-service restaurants (QSRs) and airport lounges across India and Malaysia.

Travel Food Services IPO Should you buy, sell or hold?

Narendra Solanki, Head – Fundamental Research (Investment Services) at Anand Rathi Shares and Stock Brokers, said the company commands a 26 percent market share in the Indian airport travel QSR segment and around 45 percent in the airport lounge segment, including revenues from associates and joint ventures.

“The company is a leader in QSR services at airports and highways. With growing consumer spending and expansion of airport infrastructure, the company is well placed to grow,” Solanki said.

He advised investors to consider booking partial profits on listing and holding the rest for the long term.

Mahesh M. Ojha, AVP – Research and Business Development at Hensex Securities, said the company manages 397 travel QSRs as of June 30, 2024, across India and Malaysia, and offers 117 partner and proprietary F&B brands.

"Valued at a FY25 EV/EBITDA of 16.58 times, the company is debt-free and has positive cash flows," he said.

" Investors with a long-term view may hold, while short-term investors can consider booking profits," he added.

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