Flemingo Travel Retail Ltd, one of the world’s largest duty-free and travel retail operators, has received the green light from Securities and Exchange Board of India (SEBI) to float an initial public offering (IPO).
SEBI issued final observations to Flemingo Travel on 29 June. The company had filed its draft red herring prospectus on 14 February.
Flemingo joins at least 25 other companies in receiving regulatory clearance for IPOs this year. As many as 46 firms had received the nod to go public in 2017, according to SEBI’s website.
Mumbai-based Flemingo Travel, which was originally incorporated as DFS India Pvt. Ltd, will issue fresh shares worth Rs 2,423 crore besides an offer for sale of nearly 1.13 million shares by one of its subsidiary firms, Flemingo Duty Free Shop Mumbai Pvt. Ltd.
Flemingo Travel is wholly-owned by Flemingo International BVI Ltd. which is based in Dubai and operates duty-free stores at airports, seaports, and borders. It has a presence across 33 countries with operations in Asia, Africa, Europe and Latin America.
Flemingo Travel’s IPO size is pegged at approximately Rs 2,500 crore (around $370 million).
Based on the pricing and valuation, the company will see about 40-45% stake dilution in promoter holding, VCCircle estimates show.
Flemingo Travel aims to use Rs 1,699.5 crore of the net fresh proceeds to acquire all Flemingo India shares issued to its corporate promoter Flemingo Dutyfree Shop Pvt. Ltd (Flemingo India) and Symbolic Infra Projects Pvt. Ltd, besides certain individual members of promoter group such as Viren Ahuja, Arjun Ahuja and Karan Ahuja.
The company will spend an additional Rs 522.95 crore in acquiring 100% equity interest of Flemingo International in the British arm Flemingo UK.
ICICI Securities, Yes Securities (India), Axis Capital, Credit Suisse Securities (India) and HSBC Securities and Capital Markets (India) are the merchant bankers managing the IPO.
Flemingo Travel is a global travel retail company operating in India and Sri Lanka, where it mainly operates core duty-free stores.
The firm operated 28 core duty-free stores in 11 of the top 20 international airports in India as on September 2017.
It claims to be the world’s leading travel retailer with operations in 119 locations in 26 countries across the Indian subcontinent, the US, Caribbean, Europe and various regions worldwide as on September 2017.
In India, it started travel retail operations in 2003 and has managed to expand operations to other emerging markets, diversifying revenue streams, through duty-free sales on cruise ships.
It generates revenue from multiple sales channels such as airports, cruise lines, in-flight sales, and other channels (including stores at seaport, border-crossing and downtown diplomatic/military duty-free locations).
Flemingo Travel sells a large range of products through a wide variety of store formats. Its main product categories include liquor, tobacco products, watches and jewellery, cosmetics and toiletries, food and candies, apparel and accessories and other products.
The company reported a loss of Rs 45.73 crore for the six months ended September 2017 on consolidated revenue (from operations) of Rs 325.16 crore.
Its revenue (from operations) stood at Rs 599.56 crore for the year ended March 2017, while reporting a loss of Rs 114.26 crore.
The company did not disclose consolidated profit and loss information for the fiscal before 2016-17.
