Apeejay Surrendra Park Hotels has raised over Rs 409 crore ahead of its initial public offering (IPO) which opens for subscription on Monday, February 5. The company’s board of Directors have allotted over 2.64 crore equity shares to 37 anchor investors. In this, nearly 1.31 crore shares worth Rs 204 crore have been allocated to 8 domestic mutual funds which applied for the issue through 21 schemes.

The allotment was finalised to these anchor investors on Friday at Rs 155 per share.

The highest allocation has been made to Nippon Life India Trustee Ltd-A/C Nippon India Small Cap Fund with 8.30% share followed by HDFC Life Insurance Company and 360 One Special Opportunities Fund-Series 9 which have been allocated 6.84%, each. Other funds which bagged the allotment include ICICI Prudential ELSS Tax Saver Fund, ICICI Prudential Innovation Fund and ICICI Prudential Exports and Services Fund which garnered 2.77%, each.

The Rs 920 crore IPO of Apeejay Surrendra Park Hotels comprises fresh issue of equity shares aggregating up to Rs 600 crore and offer for sale (OFS) of Rs 320 crore in which promoter group entity Apeejay Pvt Ltd will offload shares worth Rs 296 crore. Other selling shareholders include RECP IV Park Hotel Investors and Co-Investors.

Apeejay Surrendra Park Hotels is the eighth-largest hotel chain in India which operates 27 hotels across upscale and upper-midscale categories, and would be open for public subscription from February 5-7. The price band has been fixed at Rs 147-155 per share.

The hotels chain is seeking a post-issue market capitalisation of Rs 3,307 crore based on the upper price band. Bids can be made in lot size of 96 shares each in the retail category for which 10% of the net offer has been kept reserved.Non-institutional investors bidding for shares worth between Rs 2 lakh to Rs 10 lakh have to apply for a minimum of 1,344 shares while the minimum bid lot in the Rs 10 lakh plus category is 6,528 shares.The finalisation of bids will be done by February 8 and listing is likely around February 12.

Park Hotels has a chain of 22 hotels, of which 16 are via management contracts. It is one of only two hotel chains that own more than 1,000 rooms in the upscale segment. The company operates its hospitality assets under its own brands: THE PARK, THE PARK Collection, Zone by The Park, Zone Connect by The Park, and Stop by Zone.

It has a long-standing expertise of over five decades in the hospitality business of owning and operating hotels. It operates 27 hotels across luxury boutique upscale brands, and upper midscale category. The company operates 80 restaurants, night clubs and bars, offering a wide selection of culinary experiences within its hotels, as of March 2023. The sale of food and beverages, together with sale of wine and liquor contributed Rs 228 crore to total income in FY23.

The company has also established a presence in the retail food and beverage industry through retail brand ‘Flurys’.

Proceeds from the fresh issue are proposed to be utilised towards repayment of debt in part or full and other general corporate purposes.

For the six months ended September 2023, the company has reported revenue growth of 14% to Rs 272 crore. Profit after tax increased 24% to Rs 22.9 crore.

The Park hotels recorded RevPAR of approximately Rs 557 crore, an occupancy rate of 91.77% and average room per revenue of Rs 6 for the year ended March 2023.

“We like the high occupancy level of ASPHL’s owned hotels (91.6% in FY23) which is buoyed by: i) location advantage in some cities; ii) limited supply pipeline in a number of cities; iii) iconic brands of restaurants, clubs, and bars (e.g. Tantra, Roxy, iBar, etc),” said Santosh Sinha of Emkay Global.

Also Read: Capital SFB IPO to open on February 7. Check price band, issue size and other details

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