TravelPort Holidays (India) Pvt Ltd, a Mumbai-based online travel agency, is in talks with private equity players to raise funds for its offline and online expansion to tap the domestic travel industry, which is poised for significant growth in the coming years.
Heena Akkhtar, chief operating officer, TravelPort, told DNA Money that the company is raising funds through private placement. “We are currently in the process of fine-tuning the funding arrangement with one of the PE firms. So, concrete details cannot be disclosed at this stage,” she said. TravelPort expects to close the deal in another couple of months.
While valuation details are being worked out, industry sources said the company is looking at diluting 10-20% stake. “The money to be raised could be anything between Rs 15 crore and Rs 20 crore,” said the source.
Akkhtar said the company has embarked on a massive expansion of its offline and online businesses and is looking at bringing in an investment partner. “We are setting up a chain of 200 retail outlets and increasing the number of franchisees from the current 100 to 300 by the end of this fiscal. Focus will also be on online B2B play and expansion of our presence abroad,” she elaborated.
For its offline presence, TravelPort is working on two formats – company owned and operated outlets, and mini/express counters. The one-time set-up cost for each outlet is Rs 9-12 lakh and Rs 3-4 lakh, respectively. The mini/express format would largely be franchised across tier-2 and tier-3 cities. “To support the retail network, we will need a strong technology backbone to ensure smooth distribution and operation. So, a considerable part of the investment will go into enhancing our IT infrastructure,” Akkhtar said.
Established in 2003, TravelPort has witnessed a consistent growth of 20% annually in the last three years. The company posted a topline of Rs 100 crore last fiscal and its net profit stood at Rs 20 crore – or 20% of the topline.
On future trends in the Indian travel sector, Akkhtar said that rise in double-income households and disposable incomes has led to increased spend on leisure travel, which is expected to grow by 40% over the next two years. “There will also be quantum growth in luxury tours and travel to exotic destinations,” she said.
Source: DNA India