Apeejay Surrendra Park IPO: Things To Know Before Investing

Apeejay Surrendra Park IPO

Monday, February 5 Apeejay Surrendra Park Hotels IPO opened, and it will close on Wednesday, February 7. Retail and non-institutional investors gave the Park IPO’s second day of sales outstanding responses, resulting in an oversubscribed offer. The subscription status for the Apeejay Surrendra Park Hotels IPO on day one was 2.53 times.

The initial public offering (IPO) price range for Apeejay Surrendra Park Hotels is ₹147 to ₹155 for each equity share, with a face value of ₹1. On February 2, Friday, the IPO for Apeejay Surrendra Park Hotels raised ₹409 crore from anchor investors. Following its initial public offering (IPO), Apeejay Surrendra Park Hotels will issue equity shares in multiples of 96 equity shares.

The public offering of Apeejay Surrendra Park Hotels (IPO) has set aside a minimum of 75% of its shares for qualified institutional buyers (QIB), a maximum of 15% for non-institutional institutional investors (NII), and a maximum of 10% for retail investors.
It is tentative that on Thursday, February 8, the Apeejay Surrendra Park Hotels initial public offering (IPO) basis for share allocation will be finalized. On Friday, February 9, the company will commence refunds, and the shares will be credited to the allottees’ demat account the same day after the refund. On Monday, February 12, Apeejay Surrendra Park Hotels’ share price is probably going to be listed on the BSE and NSE.

Link Intime India Private Limited is the registrar for the Apeejay Surrendra Park IPO, and JM Financial Limited, ICICI Securities Limited, and Axis Capital Limited are the book running lead managers.

10 key things from the Red Herring Prospectus (RHP) that investors might want to know before investing

Promoters Of Apeejay Surrendra Park Hotels IPO

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

In all, ₹296 crore worth of shares will be sold by promoter group selling shareholder Apeejay Private Ltd, ₹23 crore by RECP IV Park Hotel Investors Ltd, and ₹1 crore by RECP IV Park Hotel Co-Investors Ltd.

Peers of IPO Apeejay Surrendra Park Hotels

The Red Herring Prospectus (RHP) indicates that Chalet Hotels Limited, Lemon Tree Hotels Limited, Indian Hotels Company Limited, EIH Limited, and SAMHI Hotels Limited are the company’s listed peers, with P/E ratios of 79.78, 92.34, 65.67, and 56.59, respectively.

Specifics of the Apeejay Surrendra Park Business Plan

The company operates its hotels using a range of strategies, such as direct ownership of hotel assets, long-term contractual leases for the real estate and/or buildings, and agreements for operation and management. It also lends its name to hotels constructed by third parties.

Business of Apeejay Surrendra Park Hotels

“Zone by The Park,” “Zone Connect by The Park,” “THE PARK,” and, most recently, “Stop by Zone,” an affordable motel brand, are the four brands that the company markets its hotels under.
Having owned and operated properties, the company has nearly 55 years of experience in the hotel industry. The company separates its selection of hotels into upper mid-scale and upmarket categories based on brand classification. With our retail brand, “Flurys,” the company has made a name for itself in the food and beverage retail sector.

Equity share lock-ins granted to anchor investors

The anchor investor portion’s equity shares that are assigned to anchor investors will be locked in the following manner: 90 days will pass after the date of allotment for 50% of the equity shares allocated to anchor investors, and 30 days will pass for the remaining 50%.

Industry of Apeejay Surrendra Park

The hospitality sector in India includes restaurants, bars, and banqueting areas for events in addition to hotels that host both domestic and international tourists and business travellers. In India, the hotel industry is divided into five main segments: Luxury and Upper Upscale, Upscale, Midscale, and Upper Midscale (Up-Mid).

There will be entry-level hotels in each segment in addition to hotels that more fully satisfy the segment requirements. The category of Luxury and Upper Upscale hotels consists of five-star, deluxe, and luxury hotels. Upscale, which is more affordable than luxury accommodations, and Upper Midscale, which is frequently assigned a three-star rating.

Future Plans for Apeejay Surrendra Park Hotels

The company’s integrated land bank in Pune and the expansion of its two existing hotels, which together have 380 rooms, are among the hotel development projects in the works as of the RHP date. The hotels can be found in Navi Mumbai and Visakhapatnam. In addition, the company intends to use its 3.36-acre land bank for future development to construct a new hotel in Jaipur and a hotel and serviced apartments at Mouza Boinchtala, on the Eastern Metropolitan Bypass side of Kolkata.

Metrics for operating Apeejay Surrendra Park Hotels

The company operated thirty hotels as of the date of this Red Herring Prospectus, falling into the upper midscale, luxury boutique, upscale, and Bangalore categories. With 2,298 rooms dispersed throughout major cities like Coimbatore, Indore, Goa, Jaipur, Jodhpur, Jammu, Navi Mumbai, Visakhapatnam, Port Blair, and Pathankot, as well as metropolises like Kolkata, New Delhi, Chennai, Hyderabad, Bangalore, and Mumbai, its presence was felt throughout India.

Apeejay Surrendra Park Finance

The revenue and profit after tax (PAT) of Apeejay Surrendra Park Hotels Limited increased by 95.81% and 270.42%, respectively, between the fiscal year ending on March 31, 2023, and March 31, 2022.

risks associated With Apeejay Surrendra Park Hotels IPO

  • Seventy-five percent of their total revenue in the fiscal year 2023 came from their top five owned hotels, of which THE PARK Kolkata accounted for twenty-seven percent. Their operations, financial situation, cash flows, and company could all suffer from any unfavorable event that affects the hotels or the communities where they are situated.
  • The company is vulnerable because of the delays in developing its hotel and land bank assets. The company’s operations, cash flows, financial status, and operating results could all be negatively impacted by any delays in the construction of new hotel buildings or the expansion of their existing facilities.

Also Read: IPO Guide: Understanding Initial Public Offerings, Application Process, and Investor Eligibility

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