Travel Food Retailer SSP Sees Debut Indian IPO Decline In Value

The share price of U.K.-listed global food and beverage (F&B) travel retailer SSP Group, has been flat today (at 3 p.m. BST), following the first day’s trading of its Indian joint venture—Travel Food Services Limited (TFS)—on two Indian exchanges; the BSE (formerly the Bombay Stock Exchange) and the National Stock Exchange (NSE).

The share price of the JV with India’s K Hospitality Corp, a brand of the Kapur Family Trust, opened at 1,125 Indian Rupees ($13.08) and closed at 1,075 ($12.50), down 4.5% (source: NSE). It means the company’s valuation (market capitalization) dropped by about $78 million to $1.7 billion at the closing bell.

Despite being almost three times oversubscribed, TFS saw soft retail interest today, even with the claim of being “the leading player” in the airport travel quick-service restaurant and lounge sectors in India. However, just five airports account for over 85% of TFS’s revenue from these two sectors, pushing up the risk factor. While institutions might like the strategic positioning in India’s burgeoning aviation market, retail investors are perhaps waiting to come in at a lower price.

Until last summer, the company operated just under 400 outlets across 14 airports in India—mostly at its largest gateways—and three airports in Malaysia. In addition, a new lounge was opened in Hong Kong in July 2024.

SSP prepares for next stage of Indian growth

SSP first took an approximate one-third stake in TFS in March 2017 before raising it to 49% pre-pandemic, and at IPO, 50.01%. Varun Kapur, managing director and CEO of TFS, said that, since the JV was established, it had built up “a significant position” in the fast-growing Indian travel market.

Domestic air traffic last year soared to over 161 million passengers, up 6% according to India’s Directorate General of Civil Aviation, which might have been reason enough in some quarters to make this a worthwhile investment. The first-day setback did not faze Kapur, who said: “The IPO today sets us up for our next stage of growth… as we begin a new chapter for the company.”

SSP, which runs restaurants, bars, and cafes in travel locations across 38 countries, utilizing a mix of international, national, and local brands, is committed to TFS for a while yet, and probably in the longer term, given the unrealized potential of the Indian market.

India is key to SSP’s profitability

Patrick Coveney, CEO of SSP Group, said: “We look forward to continuing to partner with K Hospitality to support TFS post-listing. We believe that the market potential in India, combined with TFS’s economic model and market leadership, provides a compelling opportunity to deliver growth and returns for the group.” The group has made India one of four target markets, the others being Australia, the United Arab Emirates, and Saudi Arabia, as continental Europe has performed below expectations.

SSP, which is opening the first Popeyes at British airports this summer, operates across six formats: sit-down and quick-service restaurants, bars, cafés, lounges, and food-led convenience stores. The company’s geographical split would benefit from more Indian involvement. Based on the 2024 financial year, the Indian rupee made a 5% currency contribution to sales and a whopping 22% share of operating profit. This compares with the biggest sales contributor, the Euro at 29%, but only delivering 10% of operating profit.

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