TA Associates, Fairfax Vying for a Stake in Travel Firm, Interglobe Technology Quotient

Travel reservation and technology services company, Interglobe Technology Quotient is planning to sell some of its shares

India: Boston-headquartered private equity firm, TA Associates and Prem Watsa's Fairfax Holdings have emerged as the top two contenders to buy an estimated USD200 million stake in billionaire Rahul Bhatia-controlled, InterGlobe Technology Quotient (ITQ). Existing investors Standard Chartered Private Equity, Credit Suisse and DBS are looking to liquidate their eight-year old investment in the travel reservation and technology services company. Citigroup and Moelis & Co. are advising on the stake sale. Bhatia is a cofounder of IndiGo, India's largest airline. Parashar declined to comment on specific details pertaining to the proposed transaction.

ITQ distributes international centralized reservation systems and helps set up, maintain and operate data processing centers. It is also a distributor of Travelport in six markets in the Asia-Pacific region, including India and Sri Lanka. Travelport is a travel commerce platform that aggregates content from the global airline, hospitality and travel operator industry and processed travel spending worth USD90 billion in 2014.

TechSci Research depicts that the growth of InterGlobe Technology Quotient has been significant since past few years and the company has some significant clients in online travel, booking portals, airlines and railways segment. Moreover, the company has a total client base of around 12,500 travel agencies which offers a bright opportunity for the investors. 

According to a recent report published by TechSci Research, “India Travel & Tourism Market, By Product/Service Offering, By Type, By Purpose of Visit, By Tourist Profile, By Average Duration of Stay, By Mode of Travel, Competition Forecast and Opportunities, 2011 - 2021”, the market for travel & tourism in India is forecast to grow at a CAGR of around 7.23% during 2016-2021, on account of increasing trend of medical, wellness and adventure tourism in the country and rising number of online bookings due to growing smartphone and internet penetration. Additionally, Government of India has also been focusing on the launch of several marketing and branding initiatives such as “Incredible India!” and “Athiti Devo Bhava”. This is projected to further propel growth in India travel & tourism market over the course of next five years. Domestic tourism dominated India travel & tourism market in 2015, on account of increasing number of local excursions, reginal trips, national level trips, etc., and the segment is expected to maintain its dominance in the market through 2021. Additionally, leisure and recreation is anticipated to emerge as the highest revenue generating segment in India travel and tourism market during the forecast period.