Mumbai: Mahindra Holidays & Resorts India Ltd on Thursday listed 7% above its issue price of Rs300, as investors cheered the end of a 15-month drought in initial public offers (IPOs).
Shares of Mahindra Holidays & Resorts India Ltd listed at Rs321 on the BSE, while on the National Stock Exchange, it listed at Rs324.90.
“If it had traded down, which we were comfortable it would not, then it sets us back...It’s the first credible name coming out, it’s got to succeed,” said Tarun Kataria, managing director of global banks and markets at HSBC, one of the book-running lead managers to the issue.
The IPO, which closed on 26 June, was subscribed nearly ten times.
The firm raised about Rs275 crore through a 9.27- million-share issue, of which Mahindra Holidays’ share is around Rs175 crore and the rest going to parent Mahindra & Mahindra Ltd, managing director Ramesh Ramanathan told reporters.
Auto major Mahindra & Mahindra, which owns 83% of the vacation home operator, had offered 3.36 million shares.
Mahindra Holidays will use the proceeds to expand existing projects and set up new ones, he said.
The firm, which has 27 resorts across India and Thailand, also plans to expand overseas when the market picks up.
“We had looked at South Africa, Middle East and China, we are still hopeful of those three destinations,” Ramanathan said.
“We still hold those plans, and when the market is right we will go ahead with them”.
The company did not give a guidance for FY10 but said it sees “strong growth” and hopes to maintain high occupancy levels.
“Over the last two quarters we have turned around, we have been growing very strong and we will continue to do that as ours is a value for money offering,” Ramanathan said.
The firm had an occupancy level of 75% last year, Ramanthan said, adding he expects to sutain the level in FY10 as well.
Its net profit for the year ended March 2009 was Rs79. 8 crore on total income of Rs442 crore.
At 1:10 p.m., Mahindra Holidays’ shares were trading at Rs323.60 on the BSE.