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Business News/ Markets / Ipo/  Apeejay Surrendra Park IPO: Check out 10 key things to know from RHP before investing
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Apeejay Surrendra Park IPO: Check out 10 key things to know from RHP before investing

Apeejay Surrendra Park IPO, 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. Apeejay Surrendra Park Hotels share price is likely to be listed on BSE and NSE on Monday, February 12.

Apeejay Surrendra Park Hotels IPO has opened on Monday, February 5, and will close on Wednesday, February 7. (https://www.theparkhotels.com/)Premium
Apeejay Surrendra Park Hotels IPO has opened on Monday, February 5, and will close on Wednesday, February 7. (https://www.theparkhotels.com/)

Apeejay Surrendra Park Hotels IPO has opened on Monday, February 5, and will close on Wednesday, February 7. Day 2 of the Park IPO continued to witness fantastic responses from retail and non-institutional investors, with the offer being oversubscribed. On day 1, Apeejay Surrendra Park Hotels IPO subscription status was 2.53 times.

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.

Also Read: Apeejay Surrendra Park Hotels IPO day 2: GMP, review, subscription status, other details. Buy or not?

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Apeejay Surrendra 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.

Apeejay Surrendra Park Hotels IPO details.
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Apeejay Surrendra Park Hotels IPO details.

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.

Apeejay Surrendra Park 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 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.

Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.

Also Read: Apeejay Surrendra Park Hotels IPO: 10 key risks investors should consider before investing in Park IPO

Apeejay Surrendra Park Hotels IPO Promoters

The company's promoters as of January 29, 2024, as stated in the Red Herring Prospectus are Karan Paul, Priya Paul, Apeejay Surrendra Trust, and Great Eastern Stores Private Limited. The promoters of the firm possess 82,502,500 equity shares in total as of the date of this Red Herring Prospectus, which amounts to 47.24% of the pre-Offer issued, subscribed, and paid-up equity share capital of the company.

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 Ltd will be offloading shares worth 1 crore.

Apeejay Surrendra Park Hotels IPO Peers

As per red herring prospectus (RHP), the company's listed peers are Chalet Hotels Limited (with P/E of 79.78), Lemon Tree Hotels Limited (with P/E of 92.34), Indian Hotels Company Limited (with P/E of 65.67), EIH Limited (with P/E of 56.59), and SAMHI Hotels Limited.

Apeejay Surrendra Park Business Model details

The firm applies a variety of methods to run its hotels, including direct ownership of hotel assets, long-term contractual leases for the land and/or buildings, and operation and management agreements. It also uses its name on hotels built by other parties.

Apeejay Surrendra Park Hotels business 

The firm runs hotels under the following four brands: "Zone by The Park," "Zone Connect by The Park," "THE PARK," and, most recently, "Stop by Zone," which is an economical motel brand.

The company has almost 55 years of experience in the hotel industry, having owned and operated properties. Based on brand classification, the firm divides its range of hotels into two separate categories: upper mid-scale and upmarket. The comapny has established presence in the retail food and beverage industry through our retail brand ‘Flurys’.

Apeejay Surrendra Park Industry 

In India, the hospitality industry comprises hotels that provide accommodations to both local and foreign visitors and business travellers, as well as eateries, bars, and banqueting spaces for events. There are five distinct segments for hotels in India: Luxury and Upper Upscale, Upscale, Upper Midscale (Up-Mid), Midscale, and Economy.

Apart from hotels that meet the segment requirements more thoroughly, each segment will have entry-level hotels. Five-star, deluxe, and luxury hotels make up the Luxury and Upper Upscale category. Upscale, which is more reasonably priced than top-tier hotels, and Upper Midscale, which is often categorised as 3 star.

Also Read: Apeejay Surrendra Park Hotels IPO: Issue fully booked on day 1; retail, NII portion sees huge demand. Check GMP

Apeejay Surrendra Park Financial 

Between the fiscal year ending on March 31, 2023, and March 31, 2022, Apeejay Surrendra Park Hotels Limited had a growth in revenue of 95.81% and profit after tax (PAT) of 270.42%.

Apeejay Surrendra Park Hotels Operating metrics 

As of the date of this Red Herring Prospectus, the company operated 30 hotels in the categories of upper midscale, luxury boutique, upscale, and Bangalore. Its presence was felt throughout India, with 2,298 rooms spread across major cities like Coimbatore, Indore, Goa, Jaipur, Jodhpur, Jammu, Navi Mumbai, Visakhapatnam, Port Blair, and Pathankot, in addition to metropolises like Kolkata, New Delhi, Chennai, Hyderabad, Bangalore, and Mumbai.

Apeejay Surrendra Park Hotels upcoming developments

As of the company's RHP date, the pipeline for hotel development includes the development of their integrated land bank in Pune and the extension of two of its currently owned hotels, which together have 380 rooms. The hotels are located in Visakhapatnam and Navi Mumbai. Additionally, as part of its future development plans, the business aims to use their 3.36-acre land bank to build a hotel and serviced apartments at Mouza Boinchtala on Kolkata's Eastern Metropolitan Bypass side, as well as to build a new hotel in Jaipur.

Apeejay Surrendra Park Hotels IPO key risks 

Some of the key risks are as follows;

  • Their top five owned hotels account for a significant amount of their earnings (about 75% of the total income in fiscal 2023), with THE PARK Kolkata making up 21.75% of the total income. Any unfavourable event that impacts the hotels or the areas in which they are located might have a negative impact on their operations, financial condition, cash flows, and company.
  • Due to the delays in developing its land banks and hotel assets, the firm is subject to risks. The company's operations, financial situation, cash flows, and operating results might all suffer from any delays in the development of new hotel buildings or the extension of their current facilities.

Lock-in of equity shares allotted to anchor investors

All equity shares allotted to anchor investors within the anchor investor portion will be locked in the following way: 50% of the equity shares allotted to anchor investors from the date of allotment will be locked in for 90 days, and the remaining 50% will be locked in for 30 days.

Also Read: Apeejay Surrendra Park Hotels IPO: GMP, price, other details of upcoming IPO

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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Published: 06 Feb 2024, 01:10 PM IST
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