By Nandan Mandayam and Chandini Monnappa
(Reuters) -Indian airport restaurant and lounge operator Travel Food Services’ $234 million IPO crossed the finish line on Wednesday with the help of institutional investors as risk-averse retail investors shied away amid U.S. trade deal concerns.
The IPO, India’s ninth-largest this year, came in a month when firms are expected to raise $2.4 billion through initial share sales.
It was subscribed 2.88 times, driven by institutional bids that were 7.70 times the shares reserved for them. Meanwhile, retail bids stood at a 0.69 times as of 5:54 p.m. IST.
The shares will list in Mumbai on July 14, with the company seeking a nearly $1.7 billion valuation at the upper end of its 1,045 rupees to 1,100 rupees price range.
“The overhang of a trade deal with the U.S. is one of the factors likely keeping risk averse non-institutional and retail investors away from the TFS IPO,” said Sunny Agarwal, head of fundamental equity research at SBICAPS Securities.
Analysts say overall market sentiment influences IPO demand. India’s equity benchmarks have remained flat this month amid uncertainty over U.S. trade policy, after a 5% rise in May and June on hopes of a deal.
India, the world’s third-largest aviation market, is witnessing a sharp uptick in travel demand and as disposable incomes rise, passengers are spending more on food, beverages, and premium services such as lounges.
Travel Food Services, a joint venture between UK-based SSP Group and India’s K Hospitality Corp, runs restaurants such as Jamie Oliver’s Pizzeria, Krispy Kreme and KFC at 18 airports across India, Malaysia and Hong Kong, as well as 37 lounges.
Its three-day IPO that ended on Wednesday is an offer for sale, with its largest shareholder, the Kapur Family Trust, offloading a stake worth 20 billion rupees, or 13.81%, at the top end of the price band.
($1 = 85.7030 Indian rupees)
(Reporting by Nandan Mandayam and Chandini Monnappa in Bengaluru; Editing by Eileen Soreng, Mrigank Dhaniwala and Tasim Zahid)
