Whalesbook
Travelstack Tech, the company behind the budget hotel chain FabHotels and the corporate travel management platform TravelPlus, has officially initiated the process for its Initial Public Offering (IPO). The company submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) this week. This move signals the company's intent to list on Indian stock exchanges and tap public markets for capital.
The proposed IPO is structured with a dual component: a fresh issue of shares aiming to raise up to INR 250 crore, and an offer-for-sale (OFS) where existing investors will divest a significant number of shares, estimated at up to 2.69 crore. This offering presents an exit opportunity for several prominent investors who have backed Travelstack's growth over the years.
The Core Business Model
Travelstack operates a diversified business model within the travel technology sector. Its flagship offering, TravelPlus, is a Software-as-a-Service (SaaS) platform designed for enterprises. It simplifies corporate travel by integrating booking, approval processes, expense management, and comprehensive support throughout the employee travel lifecycle.
While hotels represent its primary focus, TravelPlus also extends its services to cover flights, ground transportation, and MICE (Meetings, Incentives, Conferences, and Exhibitions). The platform serves a robust client base, including companies like Eternal, Infra.Market, Zepto, Titan Company, and UnifyApps. As of September 30, 2025, over 100 active enterprise clients had integrated their corporate travel policies onto TravelPlus, benefiting more than 1.2 lakh employees.
The genesis of TravelPlus, launched in 2020, stems from the entrepreneurial journey of Adarsh Mnpuria and Vaibhav Aggarwal, the co-founders of FabHotels. They sought to leverage their deep expertise in the hospitality supply chain, honed through managing FabHotels since 2015.
FabHotels and Value Segment Growth
FabHotels, a well-established budget hotel chain, is integral to Travelstack's operations, offering standardized and affordable accommodation. As of September 30, 2025, Travelstack managed a portfolio of 1,379 properties under the FabHotels brand.
In addition to FabHotels, the company recently introduced Via, a new value segment hotel brand. This strategic asset-light, private-label approach allows Travelstack to serve diverse customer groups and optimize its inventory efficiently across these brands, encompassing the 1,379 properties as of the specified date.
Financial Performance Ahead of IPO
Crucially, Travelstack Tech has demonstrated a significant financial turnaround, achieving profitability just prior to its IPO filing. For the six months ended September 30, 2025 (H1 FY26), the company reported a net profit of INR 32.2 crore.
Operating revenue for the same period reached INR 400.4 crore, with total expenses amounting to INR 409.6 crore. The reported net profit benefited from a deferred tax gain of INR 37.4 crore, which was instrumental in offsetting operational expenses for the period.
Looking at the full fiscal year, Travelstack managed to drastically reduce its net loss in FY25. The company posted a net loss of INR 6.3 crore, marking an impressive 95% reduction from INR 114.1 crore in the previous fiscal year, FY24. Operating revenue also saw substantial growth, surging 31% to INR 716.4 crore in FY25, up from INR 547.8 crore in FY24. The accommodation and packages segment remained the dominant revenue driver, contributing INR 712.6 crore in FY25.
Offer-for-Sale Component
The offer-for-sale component of the IPO will allow several key investors to divest their holdings. Accel India plans to sell 67.16 lakh shares. Goldman Sachs will offload 32.84 lakh shares through its private equity funds. Panthera Growth Partners intends to sell 66.69 lakh shares via its holding entities.
Qualcomm is set to sell 37.73 lakh shares. Furthermore, prominent individuals like Anupam Mittal, the founder of Shaadi.com, will sell 10.38 lakh shares. Founders and promoters Adarssh Mnpuria and Vaibhav Aggarwal plan to sell 17.91 lakh and 35.82 lakh shares, respectively.
Use of Funds
The INR 250 crore to be raised from the fresh issue is earmarked for crucial business needs. The company plans to utilize these funds for working capital requirements, to repay or prepay certain outstanding borrowings, and for general corporate purposes, ensuring a stronger financial footing post-listing.
Impact
This IPO filing by Travelstack Tech is a significant event for the Indian travel technology and hospitality sectors. It reflects growing investor confidence in the recovery and growth potential of the travel industry post-pandemic. The offering, especially with the participation of prominent venture capital and private equity firms, could pave the way for further investment and consolidation in the space. For investors, it presents an opportunity to invest in a company with a dual focus on corporate travel solutions and budget hospitality. The success of this IPO could influence sentiment towards other upcoming tech IPOs on Indian exchanges.
Impact rating: 8
Difficult Terms Explained
DRHP (Draft Red Herring Prospectus): A preliminary document filed with SEBI containing details about the company, its finances, and the proposed IPO, which is subject to regulatory review and changes before finalization.
IPO (Initial Public Offering): The process by which a private company offers its shares to the public for the first time, becoming a publicly traded company.
OFS (Offer-for-Sale): A component of an IPO where existing shareholders sell a portion of their shares to new investors, rather than the company issuing new shares.
SaaS (Software-as-a-Service): A software distribution model where a third-party provider hosts applications and makes them available to customers over the internet.
MICE (Meetings, Incentives, Conferences, Exhibitions): A specialized sector of tourism and business events.