Duty-free, travel retail chain Flemingo Travel Retail files for IPO

Duty-free, travel retail chain Flemingo Travel Retail files for IPO

By Ankit Doshi

  • 15 Feb 2018
Duty-free, travel retail chain Flemingo Travel Retail files for IPO
Credit: Shah Junaid/VCCircle

Flemingo Travel Retail Ltd, one of the world’s largest duty-free and travel retail operators, has filed its draft proposal with the capital markets regulator to float an initial public offering.

Mumbai-based Flemingo, 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 firm 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, borders, and downtown. It has presence across 33 countries with operations in Asia, Africa, Europe and Latin America.


The IPO size of the India unit is estimated at Rs 2,500 crore, said three persons aware of the development. It will see a sizable stake dilution by the promoters and will help the entity comply with the 25% minimum public float norms set by SEBI for listed Indian firms.

An IPO and the subsequent listing will make Flemingo the first company in its space to go public.

Here’s a snapshot of the proposed IPO by Flemingo Retail:



Flemingo’s IPO size is pegged at approximately Rs 2,500 crore.

Based on the pricing and valuation, the company will see about 40-45% stake dilution in promoter holding, VCCircle estimate shows.


Post the IPO, the company will comply with 25% minimum public float norms set by SEBI for listed Indian firms.

The company has reserved 75% of its shares for qualified institutional buyers (QIBs) in the IPO as it does not satisfy the condition stipulated in regulation 26 (1) of SEBI ICDR regulations. The company will have to refund full subscription money to bidders if it fails to achieve full subscription under the QIB category.

Regulation 26 (1) requires a company to have minimum average pre-tax operating profit of Rs 15 crore in at least three of the preceding five years for it to structure an IPO with at least 50% shares reserved for QIB, and the remaining 15% and 35% for high net-worth individuals and retail investors, respectively.


Use of Proceeds

Flemingo Retail 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.


The firm will also use a small portion of net fresh proceeds towards general corporate purposes.

Flemingo Retail will not receive any proceeds from the secondary sale.


ICICI Securities, Yes Securities (India), Axis Capital, Credit Suisse Securities (India) and HSBC Securities and Capital Markets (India) are merchant bankers to the IPO.


Khaitan & Co is the legal counsel representing the company on the IPO.

Luthra & Luthra Law Offices and Herbert Smith Freehills LLP are India and international legal counsel, respectively, representing the merchant bankers on the IPO.


Flemingo was originally incorporated as DFS India Pvt. Ltd in December 2007. It is a global travel retail operating in India and Sri Lanka travel retail markets, mainly operating core duty-free stores.

The firm operates 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.

Flemingo Retail is the wholly owned subsdiiary of Flemingo International BVI with headquarters in Dubai.

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).

It operated 308 stores with an aggregate retail area of 39,625 square meters as on September 2017. These include 99 stores located in 39 airports, 186 stores on-board 60 cruise ships, 23 stores at seaport, border-crossing and downtown diplomatic/military duty-free locations, and in-flight duty-free retail operations for seven airlines.

The firm has also initiated a new sales channel, duty-free retail on ferries, which commenced operation out of Świnoujście, Poland in November 2017.

Flemingo 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 got 55% of its revenue from emerging markets for fiscal 2016-17.


The company reported a loss of Rs 45.73 crore for 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 year preceding FY2016-17.

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