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LGT Business Connextions

* LGT Business Connextions is coming out with an initial public offering (IPO) of 26,25,600 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 107 per equity share.

* The issue will open on August 19, 2025 and will close on August 21, 2025.

* The shares will be listed on SME Platform of BSE.

* The share is priced at 10.70 times higher to its face value of Rs 10.

* Book running lead manager to the issue is Mark Corporate Advisors.

* Compliance Officer for the issue is Ankita Jain.

Profile of the company

LGT Business Connextions was founded in the year 2016 by Wilfred Selvaraj, Padma Wilfred, Aruldas Arulandu and Singaravelou as a service aggregator in the travel and tourism industry. The present Promoters of the company are Wilfred Selvaraj and Padma Wilfred. The company operates as a service aggregator in the travel and tourism industry. It connects and aggregate supply from third party hotels, airlines, car rentals, cruise companies and other travel service directly or through third-party aggregator wherever required and offer a wide range of services to its customers as per their desired requirements. It offers comprehensive range of travel services and tourism packages to its customers including MICE travel as well as cruise bookings, hotel bookings, in-transit arrangements, local sightseeing, and other tour and travels related services viz., customizing travel plans, travel arrangements for trade fairs, etc.

In addition to consolidated tour packages, the company provides hotel accommodation, ticketing & visa processing services on standalone basis also. It designs travel packages for both corporate/ groups and individuals for their domestic as well as international leisure travel. Further as a part of its MICE (Meetings, Incentives, Conferences and Exhibitions) services, it makes travel arrangements for its corporate clients to cater to their business meetings, conferences and events and as an incentive for their employees and business partners. It has a dedicated team to solely manage its corporate travel segment. Also, it offers 'Let's Reward' or 'Gift a Tour' to provide meaningful experiences for corporate employees and channel partners. This serves as a distinctive gifting option, enhancing the significance of their special occasions like birthdays, weddings, or anniversaries.

The company has designed its tourism package in such a manner where its customers can get a complete package which fulfils their all the requirements. Its promoters along with its marketing and sales team engages in the overall business development of the company.

Proceed is being used for:

* Meeting capital expenditure

* Meeting working capital requirement

* Meeting general corporate purposes

Industry Overview

Tourism remains an important driver of economic growth, and plays a key role in stimulating economic activity, creating jobs, generating income and foreign exchange, promoting regional development, and supporting local communities. Before the COVID-19 pandemic, the tourism sector directly contributed 4.4% of GDP and 6.9% of employment, and tourism generated 20.4% of service -related exports in OECD countries, on average. The unprecedented shock from COVID-19 saw the average direct contribution of tourism to GDP fall to 2.5% in 2020 across OECD countries with data available, with knock-on consequences for the wider economy. By 2022, this figure had returned to 3.9% on average across this same set of countries, with four countries returning to prepandemic levels or above (Figure 1.1). UN Tourism reports that globally, direct tourism GDP recovered to prepandemic levels in 2023 (UN Tourism, 2024).

Domestic travel is expected to grow 3 percent annually and reach 19 billion lodging nights per year by 2030.1 Over the same time frame, international travel should likewise ramp up to its historical average of nine billion nights. Spending on travel is expected to follow a similar trajectory, with an estimated $8.6 trillion in traveler outlays in 2024, representing roughly 9 percent of this year’s global GDP. There’s no doubt people still love to travel and will continue to seek new experiences in new places. But where will travelers come from, and where will they go. There is a snapshot of current traveler flows, along with estimates for growth through 2030. For the purposes of this report, they have divided the world into four regions - the Americas, Asia, Europe, and the Middle East and Africa.

International travel might feel more glamorous, but tourism players should not forget that domestic travel still represents the bulk of the market, accounting for 75 percent of global travel spending. Domestic travel recovered from the COVID-19 pandemic faster than international travel, as is typical coming out of downturns. And although there has been a recent boom in “revenge travel,” with travelers prioritizing international trips that were delayed by the pandemic, a return to prepandemic norms, in which domestic travel represents 70 percent of spending, is expected by 2030. India, currently the world’s sixth-largest domestic travel market by spending, is another thriving area for domestic travel. With the subcontinent’s growing middle class powering travel spending growth of roughly 9 percent per year, India’s domestic market could overtake Japan’s and Mexico’s to become the world’s fourth largest by 2030. Domestic air passenger traffic in India is projected to double by 2030, boosted in part by a state-subsidized initiative that aims to connect underserved domestic airports.

Pros and strengths

Scalable business model: The company’s business model is order driven, and comprises of optimum utilization of its resources and thereby enabling it to achieve consequent economies of scale. It can scale upward as per the requirement generated by the company. The business scale generation is basically due to the development of new markets, by adopting aggressive marketing, adding more packages also by maintaining the consistent quality of the services it offers.

End-to-end service provider: The company is complete end-to-end service provider of travel related services including domestic and international services, as well as events, meeting, exhibitions, management services provider. Its wide choice of product offerings caters to all the travel needs of an Indian and International traveller. It provides service for all the travel requirements from visa to ticketing, to holiday under one roof. This cross selling of products facilitates its customers, thereby, making it its unique selling proposition. Besides, its constant innovation in its product offering and flexibility to meet the ever-changing needs of its customers, are some of the key differentiating value propositions that has enabled it to grow. It has helped it to differentiate its products vis-a-vis the services offered by the competitors.

Organizational stability along with management expertise: The company was founded by travel industry experts including promoters of the company having over 3 decades of experience in the travel industry. This indicates its ability to maintain business viability and steer the business through operational hurdles. Its promoters are the guiding force behind the operational and financial decision of the company. Its promoters are responsible for the entire business operations of the company along with an experienced team of executives who assist them.

Risks and concerns

Maximum revenue comes from limited customers: The company derives a significant portion of its revenue from operations from its top 10 customers. The company has garnered 53.96%, 64.46% and 75.03% of the total revenue from top 10 customers in FY25, FY24 and FY23 respectively. Loss of one or more of these customers or a reduction in the amount of business it obtains from them for any reason including due to loss of, or failure to renew existing arrangements; adverse general economic conditions; disputes with such customers; decline in business of such customers; adverse changes in the financial condition of such customers; adverse change in any of such customers’ supply chain strategies could have an adverse effect on its business, results of operations, financial condition and cash flows.

Geographical constrain: The company is engaged in business of travel and tourism industry providing comprehensive MICE packages and other tour and travel services. Its sales of services are majorly concentrated in the Southern States of India which total accounts for 69.32% and 79.73% for the financial year March 31, 2025 and March 31, 2024 respectively. Telangana, in particular which accounts for a significant proportion of its business operations being 29.71%, 37.98%, and 50.37%, for the Financials Years ended March 31, 2025, March 31, 2024 and March 31, 2023 respectively. Due to the geographic concentration of its services in 3 states, its operations are susceptible to local and regional factors, such as economic and weather conditions, natural disasters, demographic changes, and other unforeseen events and circumstances. Consequently, any significant social, political or economic disruption, or natural calamities or civil disruptions in this region, or changes in policies of the state or local governments or the government of India or adverse developments related to competition in these regions, may adversely affect its business, results of operations, financial condition and cash flows.

Higher working capital requirement: The company’s business requires significant amount of working capital and major portion of its working capital is utilized towards trade receivables. Further, its growing scale and expansion may result in increase in the quantum of current assets. Its inability to maintain sufficient cash flow, credit facility and other sources of funding, in a timely manner, or at all, to meet the requirement of working capital or pay out debts, could adversely affect its financial condition and result of its operations.

Outlook

LGT Business Connextions is engaged as a service aggregator in the travel and tourism industry. The travel and tours brand of the company offers extensive services across the tourism industry. The company offers a wide range of travel services, including MICE travel, cruise and hotel bookings, in-transit arrangements, local sightseeing, customised travel plans, and arrangements for trade fairs and tours. The company has scalable business model with smooth flow of operations. On the concern side, the company derives a significant portion of its revenue from operations from its top 10 customers. Loss of one or more of these customers or a reduction in the amount of business it obtains from them could have an adverse effect on its business, results of operations, financial condition and cash flows. Moreover, the sale of its services is majorly concentrated in the southern states of India. Any adverse developments affecting its operations in such region, could have an adverse impact on its business, financial condition, results of operations and cash flows.

The company is coming out with an IPO of 26,25,600 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 107 per equity share to mobilize Rs 28.09 crore. On performance front, the company has reported 12.39% rise in revenue from operations at Rs 10,042.91 lakh in FY25 as compared to Rs 8,935.74 lakh in FY24. Moreover, the company’s net profit surged 43.62% to Rs 521.59 lakh in FY25 as compared to Rs 363.17 lakh in FY24. 

As part of its business strategy, the company is focused on attracting and retaining high quality talent as it continues to expand its service offering. It has recruited and retained talented employees from a variety of backgrounds. It expects to continue to attract talented employees through its retention initiatives. It intends to invest adequate time and resources for training its employees, which would foster mutual trust, improve the quality of its customer service and place further emphasis on its continued retention.