Is it worth subscribing to Apeejay Surrendra Park Hotels’ ₹920 crore IPO?

1.Apeejay Surrendra Park Hotels’ initial public offering (IPO) begins on February 5, 2024.
2. Issue price: ₹147-155/share; lot size: 96 shares.
3. Grey market premium = ₹60.
4. Brokerages suggest the ‘Subscribe’ rating.
5.The company enjoys a diverse portfolio across India.
6.Proven operational track record and skilled leadership.
7.Concerns include the global economic downturn and competition.
8. IPO proceeds: ₹920 crore, including ₹600 crore in fresh issue.
9.Use of funds: debt repayment and general company purposes.
10.Allotment on February 8; listing debut on February 12.
11.Apeejay Surrendra Park Hotels is ranked eighth in India for hotel room inventory.
12. Reported a net profit of ₹22.95 crore for the month ended September 30, 2023.
13. Total outstanding borrowings: ₹582.28 crore as on January 2, 2024.

Apeejay Surrendra Park Hotels’ IPO Analysis :

A full overview of the ₹920-crore IPO that launched today.

Introduction to the Apeejay Surrendra Park Hotels IPO :

Apeejay Surrendra Park Hotels’ highly anticipated ₹920 crore IPO will begin subscriptions on February 5, 2024. Bidding for the offering, which offers shares ranging from ₹147-155 per share and a lot size of 96 equity shares, will take place over three days till February 7.

Pre-IPO Market Dynamics :

Apeejay Surrendra Park Hotels is trading at a premium of ₹60 on the grey market, an unofficial venue where shares are traded prior to IPO distribution, signalling strong investor interest.

Brokerage insights on the Apeejay Surrendra Park Hotels IPO :

Analysts at many brokerage firms have urged that investors subscribe to the IPO, citing the company’s diverse pan-India hotel portfolio and favourable industry trends.

Anand Rathi: Subscribe for Long-Term Growth :

Anand Rathi analysts note Apeejay Surrendra Park Hotels’ construction of strong hospitality brands, as well as its diverse network of properties strategically positioned throughout India. They propose a ‘Subscribe-long term’ rating for the IPO, citing the company’s reasonable value and growth potential.

Marwadi Shares and Finance Ltd has a diversified portfolio and a favourable valuation :

Marwadi Shares and Finance Ltd offers a ‘Subscribe’ rating, emphasising the company’s diverse portfolio and competitive valuation.

BP Wealth is capitalising on industry momentum :

BP Wealth emphasises the opportune timing of Apeejay Surrendra Park Hotels’ IPO, which comes amid a rebounding hospitality industry and a post-pandemic economic boom. They urge subscribing to take advantage of the market’s bullish attitude.

SMC Finance: Strong Operational Record :

SMC Finance recognises Apeejay Surrendra Park Hotels’ 50-year business experience and outstanding operational performance. While praising the company’s expansion goals and debt reduction measures, they warn about the hazards associated with delayed hotel development.

Key Competitive Strengths and Concerns :

The company has successful hospitality brands, a diverse portfolio, good occupancy rates, and skilled management. However, worries include a worldwide economic slowdown, regulatory problems, and increased competition.

Offer Details :

The IPO includes a fresh share issue of ₹600 crore and a selling offer of ₹320 crore by promoters and investors. The proceeds will mostly be used for debt repayment and general company reasons.

Company Overview and Financials :

Apeejay Surrendra Park Hotels is the ninth largest chain-affiliated hotel room inventory in India as of September 30, 2023. The company declared a net profit of ₹22.95 crore and revenue of ₹272.31 crore for the period ending September 30, 2023, with total outstanding borrowings of ₹582.28 crore as of January 2, 2024.

Conclusion and Allotment Details :

JM Financial, Axis Capital, and ICICI Securities are the book-running lead managers for the IPO, while Link Intime India serves as the registrar. The final allotment is slated for February 8, with the shares debuting on February 12.

Finally, Apeejay Surrendra Park Hotels’ initial public offering (IPO) provides an opportunity to invest in a well-established operator in the hospitality sector, with strong industry trends and growth potential. Before making any investment decisions, investors should carefully consider the risks and consult with financial professionals.


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