Ventive Hospitality IPO day 1: The ₹1,600 crore initial public offering (IPO) of Ventive Hospitality is set to open for subscription today, i.e. Friday, December 20. The subscription window of this book-built issue, which is entirely a fresh issue of 2.5 crore shares, will close on Tuesday, December 24.
Meanwhile, the Blackstone-backed firm raised ₹719.5 crore from anchor investors ahead of its public issue. It allocated 1,11,90,513 shares to the anchor investors at a price of ₹643 per share, with a face value of ₹1 apiece.
Quant Mutual Fund, Government Pension Global Fund, Allspring Global Investment LLC, Tata Absolute Return Fund, Aditya Birla India Fund, SBI General Insurance Company Limited, SBI Life Insurance Company Limited, Nuvama, JM Financial Mutual Fund, and 360 One Income Opportunities Fund were among the company's top anchor investors.
According to stock market sources, the last grey market premium (GMP) of the Ventive Hospitality IPO was ₹66. Considering the upper price band of the issue at ₹643 per share, the estimated listing price of Ventive Hospitality shares is ₹709, a premium of 10 per cent.
By 4 PM on the first day of subscription on Friday, Ventive Hospitality IPO had seen an overall subscription of 69 per cent, receiving bids for 99,35,563 shares against 1,44,34,453 offered.
The retail portion was subscribed to 53 per cent, the NII (non-institutional investor) portion was booked to 7 per cent, and the portion reserved for employees was subscribed to 1.55 times. The QIB (qualified institutional buyer) portion was subscribed 1.05 times.
1. Ventive Hospitality IPO price band: The issue's price band has been set at ₹610 to ₹643 per share.
2. Ventive Hospitality IPO date: The mainboard IPO is opening for subscription on Friday, December 20, and will conclude on Tuesday, December 24.
3. Ventive Hospitality IPO size: The issue has no offer for sale (OFS) component and is entirely a fresh issue of 2.49 crore shares to raise ₹1,600 crore.
4. Ventive Hospitality IPO reservation: As much as 75 per cent of the net issue is reserved for QIBs, and 15 per cent of the net issue is reserved for non-institutional investors. The remaining 10 per cent is reserved for retail investors.
5. Ventive Hospitality IPO lot size: The minimum lot size for an application is 23 Shares. With the issue's upper price band at ₹643, the minimum amount of investment required by retail investors is ₹14,789.
6. Ventive Hospitality IPO allotment date and listing date: According to SEBI's T+3 rule, a company must list its shares three business days after the IPO closing date. This means the company's shares will be listed on the BSE and the NSE on Monday, December 30. Accordingly, share allotment has to be finalised on a T+1 basis. Since the Ventive Hospitality IPO is closing on December 24, the company will finalise the share allotment on Thursday, December 26, as December 25 is a Christmas holiday.
7. Ventive Hospitality IPO book-running lead managers and registrar: JM Financial Limited, Axis Capital Limited, HSBC Securities & Capital Markets Pvt Ltd, ICICI Securities Limited, IIFL Securities Ltd, Kotak Mahindra Capital Company Limited, SBI Capital Markets Limited are the book-running lead managers of the IPO, while KFin Technologies is the registrar for the issue.
8. Object of the issue: According to the company's RHP, it wants to use the net proceeds from the issue to pay certain borrowings availed by it and its step-down subsidiaries- SS & L Beach Private Limited and Maldives Property Holdings Private Limited. It will use the net proceeds for general corporate purposes as well.
9. Ventive Hospitality business overview: According to the company's RHP, it focuses on luxury offerings across business and leisure segments. "All of our hospitality assets are operated by or franchised from global operators, including Marriott, Hilton, Minor and Atmosphere," it said.
10. Ventive Hospitality financial performance: The company's revenue from operations for FY22 stood at ₹2,291.70 million, which rose to ₹4,308.13 million in FY23 and ₹4,779.80 million in FY24. For the six months ended 30 September of the current financial year, the company's revenue from operations was ₹3,727.78 million.
Total comprehensive income for FY22, FY23 and FY24 came at ₹297 million, ₹1,312.02 million and ₹1,666.82 million, respectively. However, for the six months ended 30 September of the current financial year, the company suffered a loss of ₹348.66 million due to recent acquisitions.
Experts point out the company's key strength is its premium hospitality assets and established track record of development and acquisition-led growth in India and the Maldives.
On the valuation front, the company appears relatively cheaper than its peers in terms of PE (price-to-earnings ratio).
As brokerage firm SBI Securities pointed out, the company is valued at FY24 PE and EV/EBITDA multiples of 90.3 times and 48.5 times, respectively, based on the upper price band on the post-issue capital.
Brokerage firm Canara Bank Securities has a 'neutral' view on the issue.
"Panchshil Realty’s commitment to innovation and sustainability strengthens its competitive differentiation. While the firm is positioned for steady growth, continuous monitoring of profitability trends is essential for accurate valuation reassessment," Canara Bank Securities said.
The brokerage firm underscored that strategic alliances with global brands such as Blackstone and JW Marriott significantly enhance its brand value and operational excellence.
It added that the company's strategic focus on hotel development rather than management ensures streamlined operations and higher returns. Additionally, lower construction costs per room further enhance profitability.
A robust development pipeline of over 1,000 keys across India and Sri Lanka supports future growth prospects. However, the primary challenge remains in efficiently scaling operations in new markets, said Canara Bank Securities.
Arihant Capital Markets has a "subscribe for long term" view on the issue.
The brokerage firm observed that the company plans to utilise ₹1,400 crore from its IPO net proceeds to repay nearly 38.79 per cent of its total outstanding borrowings. This debt reduction is expected to lower interest costs, improve profitability, and strengthen the company’s debt-equity ratio. It will also free up internal resources for future expansion and position the company to secure additional funding at competitive rates.
"The company demonstrates strong growth potential, strategically focusing on premium locations near business hubs, transport networks, and tourist destinations. Its unique 'one island, one resort' concept in Maldives and upcoming projects in Varanasi, Sri Lanka, and Bengaluru are set to bolster its market presence and enhance its competitive positioning," Arihant Capital said.
Akriti Mehrotra, a research analyst at StoxBox, pointed out that Ventive Hospitality is strategically positioned within the rapidly growing hospitality market in India and the Maldives, with a diversified portfolio of luxury properties and strong brand associations with JW Marriott, Hilton, and The Ritz-Carlton.
"While the company relies on third-party operators for 78.05 per cent of its keys, it benefits from stable revenue streams, with 41 per cent coming from annuity assets leased to high-profile tenants like HSBC and Starbucks.
"The company’s robust financial performance, with FY24 revenue of ₹4,780 million and PAT growth of 138 per cent, underscores its potential. Ventive’s valuation is attractive compared to its peers, supported by its expansion plans in India and Sri Lanka," said Mehrotra.
Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
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