TBO Tek IPO Basis of Allotment

Our Company was incorporated as Tek Travels Private Limited' in New Delhi as a private limited company under the Companies Act, 1956, pursuant to a certificate of incorporation dated November 6,2006, issued by the Registrarof Companies, Delhi and Haryana at New Delhi (the "RoC'). Thereafter, the name of our Company was changed to TBO Tek Private Limited'and a fresh certificate of incorporation dated October 22,2021 was issued by the RoC. Subsequently, our Company was converted into a public limited company and the name of our Company was changed to TBO Tek Limited' and a fresh certificate of incorporation dated November 3,2021 was issued by the RoC. For further details of conversion and change of name of our Company and details of change(s) in the registered office of our Company, see "History and Certain Corporate Matters' on page 202 of the prospectus of our Company dated May 10,2024 (the "Prospectus').

Our Company has filed the Prospectus with the RoC and the Equity Shares (as defined below) are proposed to be fisted on the National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE", and together with the NSE, the "Stock Exchanges"), and the trading will commence on Wednesday, May 15,2024.

INITIAL PUBLIC OFFER OF 16,856,623 EQUITY SHARES OF FACE VALUE OF Rs.1 EACH ("EQUITY SHARES") OF TBO TEK LIMITED ("COMPANY" OR "ISSUER") FOR CASH AT A PRICE OF Rs.920 PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF Rs.919 PER EQUITY SHARE) ("OFFER PRICE") AGGREGATING TO Rs.15,508.09 MILLION COMPRISING A FRESH ISSUE OF 4,347,826 EQUITY SHARES AGGREGATING TO Rs.4,000.00 MILLION BY OUR COMPANY ("FRESH ISSUE") AND AN OFFER FOR SALE OF 12,508,797 EQUITY SHARES AGGREGATING Rs. 11,508.09 MILLION ("OFFERED SHARES") BY THE SELLING SHAREHOLDERS (AS DEFINED BELOW), COMPRISING 2,033,944 EQUITY SHARES AGGREGATING TO Rs.1,871.23 MILLION BY GAURAV BHATNAGAR, 2,606,000 EQUITY SHARES AGGREGATING TO Rs.2,397.52 MILLION BY LAP TRAVEL PRIVATE LIMITED ("LAP TRAVEL") AND 572,056 EQUITY SHARES AGGREGATING TO Rs.526.29 MILLION BY MANISH DHINGRA (GAURAV BHATNAGAR, LAP TRAVEL AND MANISH DHINGRA, COLLECTIVELY REFERRED TO AS "PROMOTER SELLING SHAREHOLDERS"), 2,637,040 EQUITY SHARES AGGREGATING TO Rs.2,426.08 MILLION BY TBO KOREA HOLDINGS LIMITED ("TBO KOREA"), AND 4,659,757 EQUITY SHARES AGGREGATING TO Rs.4,286.98 MILLION BY AUGUSTA TBO (SINGAPORE) PTE. LTD. ("AUGUSTA TBO", ANDTOGETHER WITH TBO KOREA, THE "INVESTOR SELLING SHAREHOLDERS") (THE PROMOTER SELLING SHAREHOLDERS AND INVESTOR SELLING SHAREHOLDERS TOGETHER REFERRED TO AS THE "SELLING SHAREHOLDERS") ("OFFER FOR SALE", ANDTOGETHER WITH THE FRESH ISSUE, THE "OFFER").

THE OFFER INCLUDES A RESERVATION OF 32,608 EQUITY SHARES (CONSTITUTING 0.03% OF THE POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANYJAGGREGATING TO Rs.30.00 MILLION FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED HEREINAFTER) (THE "EMPLOYEE RESERVATION PORTION"). THE OFFER LESS THE EMPLOYEE RESERVATION PORTION IS HEREINAFTER REFERRED TO AS THE "NET OFFER". THE OFFER AND THE NET OFFER WILL CONSTITUTE 15.52% AND 15.49% OF OUR POST-OFFER PAID-UP EQUITY SHARE CAPITAL, RESPECTIVELY.

*0n a fully diluted basis.

1. Regulatory risk: Our Company and our Joint Managing Directors, namely, Ankush Nijhawan and Gaurav Bhatnagar, have received a show cause notice from the Enforcement Directorate in respect of transactions carried out on our Company's portal by certain parties based outside India. In this regard, compounding applications were filed on October 17, 2023, subsequent to which the Reserve Bank of India ("RBI") has directed our Company to regularize the transactions set out above, by way of obtaining post facto approvals or unwinding the transactions. Our Company has submitted its application to obtain post facto approval from the RBI and is awaiting such approval in this respect. Therefore, we may be subject to regulatory actions and penalties/compounding fees for such non-compliance which may adversely impact our business, financial condition and reputation. In accordance with Section 13 of the FEMA, our Company may be liable to pay a penalty of up to thrice the sum involved in the contravention above, if such amount is quantifiable, however, in the event the compounding applications are admitted by the RBI, our Company and the Joint Managing Directors will be liable to pay up to a maximum estimated amount of ^16.15 million for compounding of the transactions set out above, in accordance with the Master Direction- Compounding of Contraventions under FEMA, 1999 dated January 1,2016, as amended, issued by the RBI. For details, see "Risk Factor 6" on page 34 of the Prospectus.

2. Industry concentration risk: Our revenue is substantially dependent on the hotels and ancillary bookings whose contribution has significantly increased from 35.69% of our revenue from operations for Fiscal 2021 to 67.83% for Fiscal 2023 and was 67.59% and 72.47%, respectively, for the nine months ended December 31,2022 and December 31, 2023. In addition, all of our Gross Transaction Value ("GTV") is entirely dependent on our air and hotels and ancillary bookings in the last three Fiscals and in the nine months ended December 31,2022 and December 31,2023, respectively. Factors that may negatively impact our hotels and ancillary bookings could have an adverse effect on our business, prospects, results of operations and financial condition.

3. Risk in relation to dependence on limited Suppliers: Our business depends on our relationships with a limited range of Suppliers, and any adverse changes in such relationships, or our inability to enter into new relationships, could adversely affect our business and results of operations. The details of contribution by our top Supplier, top five Suppliers and top 10 Suppliers are set out below:

4. Risk in relation to pricing of inventory by the Suppliers: Our business is exposed to pricing pressure from our Suppliers who may withhold inventory or modify the terms of our arrangements, including for a reduction or elimination of commission, incentive or other compensation payable to us, which could adversely affect our business and results of operations.

5. Risk in relation to secondary transaction in the Equity Shares below the Cap Price; Our Cap Price of Rs. 920 is at a premium of 1.60 times to the price at which our existing shareholders, namely Augusta TBO and TBO Korea, have sold Equity Shares to General Atlantic in October 2023 and February 2024.

6. Growth and competition risk: If we are unable to continue to increase the number of Buyers and Suppliers using our platform such that (a) the Suppliers stop listing their offerings on our platform, we may be unable to maintain and grow our Buyers' traffic and conversely, if we are unable to maintain and grow our Buyers' traffic, our Suppliers may stop using our platform; (b) In the event our competitors expand their product offerings, Suppliers and Buyers may choose to use their platforms instead. Our customers may also choose not to list on external platforms and instead, rely on their own online platforms and change their sales and marketing models through technology and infrastructure investments, in which case our business and results of operations may be adversely affected.

7. Risk in relation to valuation not being comparable to listed peers; We do not have any exact comparable listed peers in India or abroad. Accordingly, valuation of our Company as compared with other listed Indian platforms operating in the travel industry, global companies operating in travel industry and other online platforms listed in India, may not be comparable and could be higher on account of certain aspects.

8. International market risk; We derive a significant portion of GTV and revenue from operations from a limited number of markets outside India and any adverse developments in such markets could adversely affect our business and results of operations.

9. Risk related to online payment methods: We are subject to risks related to online payment methods which may affect our business, brand, results of operations and financial condition. There have been instances in the past where chargeback has been raised in relation to credit card transactions and we incurred charges amounting to Rs.0.89 million, Rs.76.43 million, Rs.13.89 million, Rs.12.88 million and Rs.13.26 million for Fiscal 2021,2022 and 2023 and the nine months ended December 31,2022 and December 31,2023, respectively.

10. Risk related to dependence on Material Subsidiary: We derive a substantial portion of our revenue from operations from our Material Subsidiary, Tek Travels DMCC. Any events that impact the business of our Material Subsidiary, could adversely affect our business and results of operations. In Fiscal 2021, 2022 and 2023 and nine months ended December 31, 2022 and December 31, 2023, it contributed 32.82%, 47.57%, 62.29%, 62.97% and 67.46% of our overall revenue from operations, respectively.

11. Objects related risk; A portion of the Net Proceeds will be utilized towards achieving growth of our platform through marketing and promotional activities which may include incentivizing Buyers, search engine advertising optimisation and marketing on social media platforms, which may not deliver the expected results and may adversely affect our business. Further, our Company intends to utilise Rs. 1,000 million for investing in our Material Subsidiary, Tek Travels DMCC, which is incorporated in Dubai, UAE.

Other risks:

12. The four BRLMs associated with the Offer have handled 52 Public Issues in the past three years, out of which 15 Issues closed below the offer price on listing date.

Issues handled where there were no common BRLMs.

13. The weighted average cost of acquisition of all Equity Shares transacted in the last one year, 18 months and three years, are as follows:

Ms certified by N BT and Co, Chartered Accountants, by way of their certificate dated May 6, 2024.

*Excluding gift and bonus transactions.

This Offer was made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (‘SCRR') read with Regulation 31 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (‘SEBI ICDR Regulations'). The Offer was made in accordance with Regulation 6(2) of the SEBI ICDR Regulations and through a book building process wherein not less than 75% of the Net Offer was available for allocation on a proportionate basis to Qualified Institutional Buyers (‘QIBs', and such portion, the 'QIB Portion'). Our Company and the Selling Shareholders, in consultation with the Book Running Lead Managers, allocated 60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations (‘Anchor Investor Portion'), out of which at least one-third was reserved for allocation to domestic Mutual Funds only, subject to valid Bids having been received from the domestic Mutual Funds at or above the Anchor Investor Allocation Price, in accordance with the SEBI ICDR Regulations. However, if the aggregate demand from Mutual Funds was less than 5% of the Net QIB Portion, the balance Equity Shares available for allocation could have been added to the remaining QIB Portion for proportionate allocation to QIBs. Further, 5% of the Net QIB Portion was made available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion was made available for allocation on a proportionate basis to all QIB Bidders other than Anchor Investors, including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not more than 15% of the Net Offer was made available for allocation to Non-lnstitutional Bidders out of which (a) one third of such portion was reserved for applicants with application size of more than Rs. 0.20 million and Rs. 1.00 million; and (b) two third of such portion was reserved for applicants with application size of more than Rs. 1.00 million rupees, provided that the unsubscribed portion in either of such sub-categories have been allocated to applicants in the other sub-category of Non-lnstitutional Bidders and not more than 10% of the Net Offer was available for allocation to Retail Individual B idders (‘RIBs') in accordance with SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. Further, Equity Shares were allocated on a proportionate basis to Eligible Employees Bidding in the Employee Reservation Portion, subject to valid Bids received from them at or above the Offer Price. All potential Bidders, other than Anchor Investors, were required to mandatorily utilise the Application Supported by Blocked Amount ('ASBA') process by providing details of their respective bank account (including UPI ID) in case of UPI Bidders in which the corresponding Bid Amount was blocked by the SCSBs under the UPI Mechanism, as applicable to participate in the Offer. Anchor Investors were not permitted to participate in the Anchor Investor Portion through the ASBA process. For details, see ‘Offer Procedure" on page 429 of the Prospectus.

The Bidding for Anchor Investors opened and closed on Tuesday, May 7,2024.. The Company received 47 applications from 35 Anchor Investors for 78,89,248 Equity Shares. The Anchor Investor Offer Price was finalized at Rs.920 per Equity Share. A total of 75,70,807 Equity Shares were allocated under the Anchor Investor Portion aggregating to Rs.6,96,51,42,440/-.

The Offer received 23,99,219 applications for 81,49,65,168 Equity Shares (including applications from Anchor Investors and prior to rejections considering only valid bids) resulting in 48.35 times subscription. The details of the applications received in the Offer from various categories (including Anchor Investors) are as under (before rejections):

Note: l this excludes 28,824 applications for 584,768 Equity Shares from Retail individual investors (28,810 applications for 581616 equity Shares) and Non-institutional

Investors (above Rs.2 Lakhs and up to Rs.10 Lakhs) (14 applications for 3,152 Equity Shares) which were not in bid book but which were banked.

Final Demand

A summary of the final demand as per NSE and BS E as on the Bid/Offer Closing Date at different Bid prices is as under:

The Basis of Allotment was finalized in consultation with the Designated Stock Exchange, being NSE on Monday, May 13, 2024.

A. Allotment to Retail Individual Investors (after rejections) (including ASBA Applications)

The Basis of Allotment to the Retail Individual Investors, who have bid at the Cut-Off Price or at the Offer Price of Rs.920 per Equity Share, was final zed in constitution with NSE. This category has been subscribed to the extent of 25.94 times (after rejections). The total number of Equity Shares Allotted in Retail Portion is 16,82.401 Equity Shares to 105.150 successful Retail Individual Investors. The category-wise details of the Basis of Allotment are as under:

Note: 1 additional Share shall be allotted to 1 Allottees from amongst 8970 Successful Applicants from the categories 32- 208 (i.e. excluding successful applicants from Category 16) in tie ratio of 1: 8970.

B. Allotment to Employee Reservation (After Rejections) (including AS BA Applications)

The Basis of Allotment to the Eligible Employees, who have bid at the Offer Price Rs.920, was finalized in consultation with the NSE. This category has been subscribed to the extent of 1.26 times on an overall basis. The total number of Equity Shares Allotted in this category is 32,608 Equity Shares to 449 successful Eligible Employees. The category-wise details of the Basis of Allotment are as under:

Note: 1 additional snare Has been allocated to Categories 32 and b4 in the ratio of 1 : 10 and 10 : 23.

C. Allotment to Non-institutional Investors (More than Rs. 200,000 and up to Rs. 1,000,000) (after rejections)

The Basis of Allotment to the Non-institutional Investors (More than Rs.200,000 and up to Rs.1,000,000), who have bid at the Offer Price of Rs.920 per Equity Share was finalized in consultation with NSE. The sub-category of the Non-institutional Portion comprising Non-institutional Investors Bidding (More than Rs. 200,000 and up to Rs. 1,000,000) has been subscribed to the extent of 40.40 times. The total number of Equity Shares Allotted in this category is 8,41,201 Equity Shares to 3,755 successful Non- Institutional Investors. The category-wise details of the Basis of Allotment are as under (Sample):

Note: 1 (One) lot of 224 shares have been alloted to All the Applicants from Serial No. 53 to 54 (except the 2 Application which were already allocated) in the ratio of 1:110 (All these categories have been moved at the end for easy reference).

Note: 1 additional Share shall be allotted to 81 Allottees from amongst 208 Successful Allottees from SI no 2 to 54 (i.e. excluding successful applicants from Category 224) in the ratio of 81 : 208.

D. Allotment to Non-institutional Investors (More than Rs.1,000,000))

The Basis of Allotment to the Non-institutional Investors (More than Rs.1,000,000), who have bid at the Offer Price of Rs.920 Equity Share was finalized in consultation with the NSE. The sub-category of the Non-institutional Portion comprising Non-institutional Investors Bidding above Rs.1,000,000 has been subscribed to the extent of 55.67 times (after rejections). The total number of Equity Shares Allotted in this category is 16,82,401 Equity Shares to 7,510 successful applicants Non-institutional Investors. The category-wise details of the Basis of Allotment are as under (Sample):

Note: 1 (One) lot of 224 shares have been alloted to All the Applicants from Serial No. 224 to 233 in the ratio of 1:10 (All these categories have been moved at the end for easy reference).

Note: 1 additional Share shall be allotted to 161 Allottees from amongst 7510 Successful Applicants from all the categories in the ratio of 161: 7510.

E. Allotment to QIBs (Excluding Anchor Investors) (after rejections)

Allotment to QIBs (excluding Anchor Investors), who have Bid at the Offer Price of Rs.920 per Equity Share has been done on a proportionate basis in consultation with NSE. Category has been subscribed to the extent of 125.26 times of Net QIB Portion. As per the SEBIICDR Regulations, Mutual Funds were Allotted 5 % of the Equity Shares of Net QIB Portion available i.e. 2,52,361 Equity Shares and other QIBs including Mutual Funds were Allotted the remaining available Equity Shares i.e. 47,94,844 Equity Shares on a proportionate basis. The total number of Equity Shares Allotted in the Net QIB Portion is 50,47,205 Equity Shares, which were allotted to 219 successful QIB Bidders. The category- wise details of the Basis of Allotment are as under.

F. Allotment to Anchor Investors

The Company, in consultation with the BRLMs has allotted 75,70,807 Equity Shares to 35 Anchor Investors (through 47 Anchor Investor Application Forms, including 14 domestic Mutual Funds through 26 Mutual Fund schemes) at an Anchor Investor Issue Price of Rs.920 per Equity Share in accordance with the SEBI ICDR Regulations. This represents 60% of total QIB portion.

The IPO Committee of the Board of Directors in its meeting held on May 13,2024 has taken on record the Basis of Allotment of Equity Shares approved by the Designated Stock Exchange, being NSE and allotment resolution was passed on May 13, 2024. The Allotment Advice-cum-Unblocking intimations have been dispatched to the email id of the Investors as registered with the depositories. Further, the instructions to the Self Certified Syndicate Banks for unblocking of funds, transfer to Public Issue Account have been issued on May 14, 2024 and payments to non-Syndicate brokers have been issued on May 14,2024. In case the same is not received within ten days, investors may contact the Registrar to the Offer at the address given below. The Equity Shares Allotted to the successful Allottees have been uploaded on May 14,2024 for credit into the respective beneficiary accounts subject to validation of the account details with the depositories concerned. The Company filed the listing application with NSE and BSE on May 14, 2024. The Company has received listing and trading approval from NSE and BSE and the trading will commence on May 15, 2024.

Note: All capitalised terms used and not specifically defined herein shall have the same meaning as ascribed to them in the Prospectus.

INVESTORS PLEASE NOTE

The details of the Allotment made will be hosted on the website of the Registrar to the Offer, Link Intime India Private Limited at www.linkintime.co.in.

All future correspondence in this regard may kindly be addressed to the Registrar to the Offer quoting full name of the First/Sole Bidder, Bid cum Application Form number, Bidder DP ID, Client ID, PAN, date of submission of Bid cum Application Form, address of the Bidder, number of Equity Shares applied for, the name and address of the Designated Intermediary where the Bid cum Application Form was submitted by the Bidder and a copy of the Acknowledgment Slip received from the Designated Intermediary at the address given below:

 

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARES ON LISTING OR THE BUSINESS PROSPECTUS OF TBO TEK LIMITED.

TBO Tek Limited has filed the Prospectus with RoC on May 11, 2024. The Prospectus is available on the website of the Company at www.tbo.com, website of the SEBI at www.sebi.gov.in, as well as on the websites of the BRLMs, i.e. Axis Capital Limited, Goldman Sachs (India) Securities Private Limited, Jefferies India Private Limited and JM Financial Limited at www.axiscapital.co.in , www.goldmansachs.com, www.jefferies.com and www.jmfl.com, respectively and the websites of NSE and BSE at www.nseindia.com   and www.bseindia.com, respectively. Any potential investor should note that investment in equity shares involves a high degree of risk and for details relating to such risk, specific attention of the investors is invited to "Risk Factors" on page 28 of the Prospectus. Bidders should not rely on the DRHP filed with SEBI, instead investors should rely on Prospectus filed with SEBI, for making any investment decisions.

The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended ("U.S. Securities Act") or any state securities laws in the United States, and unless so registered, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U. S. state securities laws. Accordingly, the Equity Shares are being offered and sold outside the United States in "offshore transactions" as defined in and in reliance on Regulation S and the applicable laws of each jurisdictions where such offers and sales are made. There will be no public offering of Equity Shares in the United States.