Apeejay Surrendra Park Hotels, the eighth-largest hotel chain in India with 27 hotels spanning upscale and upper-midscale categories, is set to launch its INR 920-crore IPO. The public subscription period will run from February 5 to 7, with a price band set at INR 147-155 per share.
The IPO consists of a fresh issue of equity shares amounting to INR 600 crore and an offer for sale (OFS) of INR 320 crore. In this OFS, the promoter group entity Apeejay Pvt Ltd plans to divest shares valued at INR 296 crore. Additional selling shareholders include RECP IV Park Hotel Investors and Co-Investors.
The hotel chain aims for a post-issue market capitalization of INR 3,307 crore at the upper price band. In the retail category, bids can be placed in lot sizes of 96 shares, with 10% of the net offer reserved for this segment.
Non-institutional investors (NIIs) looking to bid for shares valued between INR 2 lakh to INR 10 lakh must apply for a minimum of 1,344 shares, whereas in the category of INR 10 lakh-plus, the minimum bid lot is 6,528 shares.
Bids are expected to be finalized by February 8, with the listing anticipated around February 12. Park Hotels boasts a pipeline of 22 hotels, with 16 being developed through management contracts. Remarkably, it is one of just two hotel chains in the upscale segment owning more than 1,000 rooms. The company manages its hospitality assets under distinct brands such as THE PARK, THE PARK Collection, Zone by The Park, Zone Connect by The Park, and Stop by Zone.
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With a rich legacy spanning over five decades in the hospitality industry, it possesses extensive expertise in owning and managing hotels. The company oversees 27 hotels, encompassing luxury boutique upscale brands and the upper midscale category. As of March 2023, it operates 80 restaurants, nightclubs, and bars, providing a diverse array of culinary experiences within its establishments. In the fiscal year 2023, the revenue from the sale of food and beverages, along with the sale of wine and liquor, contributed INR 228 crore to the total income.
The company has also made strides in the retail food and beverage industry through the establishment of the retail brand ‘Flurys.’
The funds raised from the new issuance are intended to be used for the partial or complete repayment of debt, as well as for various general corporate purposes.
During the six months ending in September 2023, the company experienced a 14% growth in revenue, reaching INR 272 crore. The profit after tax also saw a notable increase of 24%, totaling INR 22.9 crore.
The Park hotels achieved a Revenue per Available Room (RevPAR) of around INR 557 crore, with an occupancy rate of 91.77% and an average revenue per room of INR 6070 for the fiscal year ending in 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.
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