Apeejay Surrendra Park Hotels IPO opened for subscription on Monday, February 5, and will close today (Wednesday, February 7). During the first two days of subscription, retail and non-institutional investors responded enthusiastically to the Park Hotel IPO. As perBSE data, the Park IPO subscription status was 5.82 times on day two, while Apeejay Surrendra Park Hotels IPO subscription status was 2.53 times on day one.
Apeejay Surrendra Park Hotels IPO price band has been fixed in the range of ₹147 to ₹155 per equity share of the face value of ₹1 each. Apeejay Surrendra Park Hotels IPO raised ₹409 crore from anchor investors on Friday, February 2. The Apeejay Surrendra Park Hotels IPO lot size is 96 equity shares and in multiples of 96 equity shares thereafter.
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The Park Hotels IPO has reserved not less than 75% of the shares in the public issue for qualified institutional buyers (QIB), not more than 15% for non-institutional Institutional Investors (NII), and not more than 10% of the offer is reserved for retail investors.
Tentatively, Apeejay Surrendra Park Hotels IPO basis of allotment of shares will be finalised on Thursday, February 8, and the company will initiate refunds on Friday, February 9, while the shares will be credited to the demat account of allottees on the same day following refund. Apeejay Surrendra Park Hotels share price is likely to be listed on BSE and NSE on Monday, February 12.
The Park Hotels IPO, which is worth ₹920 crore, consists of fresh issue of equity shares aggregating up to ₹600 crore and offer-for-sale (OFS) aggregating up to ₹320 crore.
The company plans to use the net proceeds to fund general corporate operations as well as the return or prepayment, in full or in part, of any outstanding borrowings that the company has taken out.
Apeejay Private Ltd, promoter group selling shareholder, would be offloading shares worth ₹296 crore, RECP IV Park Hotel Investors Ltd will be selling shares worth ₹23 crore, and RECP IV Park Hotel Co-Investors Lts will be offloading shares worth ₹1 crore.
The registrar for the Apeejay Surrendra Park IPO is Link Intime India Private Ltd, and the book running lead managers are JM Financial Limited, ICICI Securities Limited, and Axis Capital Limited.
Park Hotel IPO GMP today, or grey market premium, is +34. This indicates Apeejay Surrendra Park share price were trading at a premium of ₹34 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Park Hotel share price was indicated at ₹189 apiece, which is 21.94% higher than the IPO price of ₹155.
Based on the last 12 sessions of grey market activity, today IPO GMP is showing signals towards the lower side, as per analysts at investorgain.com. The lowest GMP is ₹0, while the highest GMP is ₹70.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
The brokerage believes that the business is requesting a PE multiple on the high end of the price range of 56.36x using diluted EPS for FY23 ( ₹2.75), and for H1FY24 ( ₹1.31), it is requesting a PE of 59.16x annualizing diluted EPS. The industry average is 73.6x, with 92.34x and 56.59x being the greatest and lowest values, respectively. Based on its NAV of ₹33.13 as of September 30, 2023, the issue is valued at a P/BV of 4.68. The issue looks to be fairly priced.
"The company business has become profitable from FY23 onwards and boasts successful hospitality brands with a diversified portfolio of hotels and restaurants across India, contributing to stable earnings. Further develop and strengthen the ‘Flurys’ brand in the retail food and beverage business through expansion plans.
Looking at all the factors, risks, opportunities and valuation, investors can subscribe to the issue with a long-term view," the brokerage said.
In addition to having a strong operating track record of high occupancy, competitive average room rates, and RevPAR for its properties, the brokerage claims that the company is a well-established player in the Indian hotel industry with a portfolio of 30 hotels spread across popular areas in key geographies in India. The company's historical revenue share from the F&B segment has also been higher than that of its peers.
“We believe the asset light model, repayment of debt, strong industry tailwinds, and development of new owned and managed properties with improved operational efficiency to achieve superior performance. Hence we recommend a SUBSCRIBE to the issue,” the brokerage said.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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