UK/INDIA. SSP Group and its joint-venture partner K Hospitality Corp have taken the latest steps towards a planned initial public offering (IPO) for Travel Food Services (TFS) in its home market. Listing and trading of TFS shares on the Indian Stock Exchanges is planned for 14 July.
The latest moves include setting the price band between IR1,045 and IR1,100 per share (US$12.19 to US$12.83 at today’s exchange rates). This indicates an expected market capitalisation for TFS between IR137.6 billion and IR144.8 billion (US$1.61 billion to US$1.69 billion), based on the price band range.
The final IPO pricing will be determined by TFS through a book build process with the IPO offer opening on 7 July and closing on 9 July.
TFS has filed its Red Herring Prospectus (RHP) with the Indian regulatory authorities for the IPO. As reported in May, the company received ‘in principle’ clearance from SEBI, the Indian market regulator, to proceed.
SSP will shortly purchase additional shares in TFS (representing 1.01% of TFS’s issued share capital) for a consideration of around £12.5 million (US$17.2 million). Following completion SSP will hold 50.01% of TFS’s issued share capital.
On 10 December 2024, SSP and K Hospitality Corp first announced plans for the IPO.
Since that date, a period of market and investor education “has progressed well”, said SSP.
The planned IPO represents an offer for sale of equity shares in TFS by the Kapur Family Trust, the shareholding entity of K Hospitality Corp. TFS and SSP will not receive any proceeds from the offer. SSP currently holds 49% of TFS (which is consolidated in SSP’s reported financial results) for which it paid a net consideration of £57.9 million.
Assuming the upper end of the price band range above, an SSP statement noted that the Kapur Family Trust would also sell shares in the proposed IPO that represent up to 13.81% of TFS’s issued share capital.
Under Indian regulations, both SSP and the Kapur Family Trust are required to maintain their entire shareholding for at least six months post-TFS listing and cumulatively hold at least 20% of TFS’s shares for at least 18 months post the IPO.
Board appointments
Immediately upon completion of the IPO, SSP and TFS will both operate as separately listed companies, with SSP holding 50.01% of TFS.
Consistent with the strategic importance of TFS to SSP, SSP Group Deputy CEO Jonathan Davies and SSP CEO Asia Pacific Jonathan Robinson will join the Board of TFS, replacing SSP’s existing nominee directors, subject to necessary regulatory clearances.
TFS is the leading player in the fast-growing airport quick-service restaurant (QSR) and lounge sectors in India. It manages 442 QSRs and 37 lounges (as of 31 March).
TFS manages a strong portfolio of in-house brands, as well as international names such as KFC, Domino’s Pizza, Jamie Oliver’s Pizzeria and Wagamama. The company is present in 14 airports in India and three airports in Malaysia.
Analyst reaction
Reacting to the latest IPO news and band pricing, Shore Capital said in a statement this morning: “SSP has announced the timing and pricing of the IPO of its Indian JV, Travel Food Services, valuing the joint venture at £1.2 billion (equivalent to c.75p per SSP share), towards the higher end of our initial expectations, with SSP’s stake alone the equivalent to 43% of the Group’s current market capitalisation for just 15% of its earnings base.” ✈
