Mumbai: Aunit of utility vehicle maker Mahindra and Mahindra Ltd (M&M), Mahindra Holidays and Resorts India Ltd said it has set a price band of Rs275-325 a share for its initial public offer (IPO) of 9.27 million shares.
The issue comprises a fresh issue of 5.89 million shares and an offer for sale of 3.36 million shares by M&M, and would represent about 11% of the post-issue paid-up capital, the firm said on Friday.
The proposed issue by Mahindra Holidays will end a 15-month drought in India as firms had desisted from making public offerings in 2008, in the?wake?of the economic slowdown and a falling market.
The proceeds from the issue will be deployed into new projects and expansion of existing resorts over three years, managing director Ramesh Ramanathan told reporters.
The company, which has 27 resorts across India and Thailand, is looking to tap new markets in South Africa and China and is also looking to acquire properties within the country, he said at a press briefing to announce the issue. “We are looking at those markets. We will go there at the right time,” he said. “We have not finalized our plans (for international expansion). We are looking at replicating our entire business model there, including new properties and new members.”
Kotak Mahindra Capital Co. Ltd, HSBC Securities and Capital Markets (India) Pvt. Ltd and SBI Capital Markets Ltd are the book running lead managers to the issue. At least 60% of the issue will be allocated on a proportional basis to qualified institutional buyers, about 10% would be allocated to non-institutional bidders and not less than 30% to retail investors.
The firm that owns Club Mahindra Resorts added 19,000 new members in 2008-09 and cumulative member base increased to 92,825 in 2008-09.
“Our strategy is to build our own properties, to lease and also to acquire,” Ramanathan said. The company currently has a land bank of about 251 acres across the country.
“Our members buy membership (schemes) using EMI (equated monthly instalments) plans. So the receivables are EMIs due from the members,” he said.
The IPO opens on 23 June and closes 26 June.