TBO Tek Limited has encountered a regulatory hurdle as the Reserve Bank of India (RBI) declined to grant post-facto approval for payments totaling ₹712.25 million made through third parties. This development marks a significant challenge for the travel technology company as it navigates compliance issues with India's central bank.

RBI's Decision

According to a disclosure made by TBO Tek under Regulation 30 of SEBI Listing Obligations and Disclosure Requirements, the company received communication from its Authorized Dealer (AD) Banker on September 3, 2025. The message conveyed that the RBI has not acceded to the post-facto approval sought by TBO Tek for the receipt of payments amounting to ₹712.25 million through third parties or an Indian entity on behalf of a person resident outside India.

Company's Response

In light of this development, TBO Tek stated that it is currently evaluating the available options to determine the appropriate course of action. The company emphasized its commitment to complying with all applicable laws and regulations. Neera Chandak, Company Secretary of TBO Tek, assured stakeholders that the company will continue to keep the Stock Exchanges informed of any material developments regarding this matter.

Background

This issue traces back to at least April 8, 2025, when TBO Tek had initially disclosed its application to the RBI seeking post-facto approval for these third-party payments. The recent communication from the RBI, refusing this approval, puts the company in a position where it must carefully consider its next steps to address the regulatory concerns.

Implications

The RBI's decision not to grant post-facto approval for such a substantial amount could have significant implications for TBO Tek's financial operations and compliance status. It underscores the importance of adherence to regulatory norms in international financial transactions, particularly for companies dealing with cross-border payments.

As TBO Tek consults with its advisors and evaluates its options, investors and stakeholders will be keenly watching for the company's next moves and any potential impact on its business operations or financial standing. The travel technology sector, in which TBO Tek operates, often involves complex international transactions, making regulatory compliance a critical aspect of business operations.

TBO Tek Limited, with its registered office in New Delhi and corporate office in Gurgaon, continues to operate in the travel technology space, offering booking experiences through its platform at www.tbo.com . As this situation unfolds, the company's ability to navigate these regulatory challenges will be crucial for maintaining investor confidence and ensuring smooth business operations.

TBO Tek Ltd. , a Gurugram-based travel market services provider, has announced a significant move to expand its global reach in the luxury travel market. The company's wholly-owned step-down subsidiary, TBO LLC, has approved the acquisition of 100% ownership interest in Classic Vacations LLC, a US-based luxury travel wholesaler, for up to $125 million.

Acquisition Details

The deal, subject to closing adjustments, is expected to be completed by the first week of October 2025. Notably, the acquisition requires no regulatory approvals, paving the way for a smooth transition.

Strategic Expansion

This strategic acquisition aligns with TBO Tek's plans for inorganic growth and expansion into the premium outbound travel market. Classic Vacations has a strong presence across the US luxury travel space, boasting a network of high-value travel advisors and deep ties with major American consortia.

Gaurav Bhatnagar, TBO's co-founder and Jt. Managing Director, expressed enthusiasm about the deal, stating, "We're thrilled to bring Classic Vacations into the TBO family – the company's longstanding delivery of outstanding services has earned the trust of its more than 10,000 travel advisors in the US, and their end customers, making them a seamless fit for our vision moving forward in the fast-evolving travel and tourism industry."

Financial Highlights

Classic Vacations has demonstrated solid financial performance, with net sales of $111.04 million for the year ended December 31, 2024. The company's revenue and profitability have remained relatively stable over the past three years:

Funding the Acquisition

To facilitate this acquisition, TBO Tek has approved an inter-corporate loan of up to ₹350 crore to its wholly-owned material subsidiary, Tek Travels DMCC. This loan will be used to aid TBO LLC in funding the acquisition.

Additionally, TBO Tek will issue a letter of comfort and subsequently a corporate guarantee for up to $77 million to secure credit facilities of up to $70 million from Standard Chartered Bank for TBO LLC.

Market Impact

The acquisition is expected to strengthen TBO Tek's position in the global luxury travel market. Melissa Krueger, CEO of Classic Vacations, commented on the synergies, saying, "TBO's tech-centric solutions are geared fully toward our travel advisor community. TBO connects us to its first-class technology platform unlike what the wholesale market has ever had access to – allowing us to bring even more resources, tools and insider connections to our valued travel advisors."

Looking Ahead

Post-acquisition, Classic Vacations will become a wholly-owned subsidiary of TBO LLC and a material step-down subsidiary of TBO Tek. The company plans to leverage the combined strengths of both entities to accelerate growth as a global leader in the luxury travel market.

Despite the positive news, TBO Tek's shares have seen a 22% decline year-to-date, closing 1% higher at ₹1,376.50 on the day of the announcement, still 31% below their 52-week high of ₹2,001.00.

As the global demand for luxury travel is projected to expand significantly over the coming decade, this strategic move positions TBO Tek to capitalize on evolving traveler expectations and drive sustained value in the premium travel segment.