park hotels ipo subscribe: Park Hotels IPO opens. Should you subscribe to the issue?

park hotels ipo subscribe: Park Hotels IPO opens. Should you subscribe to the issue?

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The initial public offer (IPO) of Park Hotels opened for subscription. The issue will be available for investors to bid till February 7. Ahead of the IPO launch, the company raised Rs 409 crore from marquee anchor investors including Nippon India MF, ICICI Pru MF among others.

The IPO comprises a fresh issue of equity shares aggregating up to Rs 600 crore and an offer for sale (OFS) of Rs 320 crore in which promoter group entity Apeejay Pvt Ltd will offload shares worth Rs 296 crore. Other selling shareholders include RECP IV Park Hotel Investors and Co-Investors.

Also Read | Park Hotels IPO: Company raises Rs 409 crore via anchor allotment

Park Hotels IPO price band

The price band has been fixed at Rs 147-155 per share. About 75% of the IPO will be reserved for qualified institutional buyers, 15% will be set aside for non-institutional investors and the remaining 10% for retail investors.

Park Hotels IPO review

Analysts advised investors to subscribe to the issue over the company’s marquee hotels portfolio, brand reputation and fair valuations.”The organisation has established thriving hospitality brands by combining product innovation and exceptional service, aiming to engage customers with a varied and comprehensive range of offerings. We recommend a subscribe rating for the long term,” said Anand Rathi.Also Read | IPO calendar: Rashi Peripherals, Park Hotels among 5 issues to raise about Rs 2,700 cr next weekAt the upper price band, the company is valuing at a P/E of 68.8x, of its FY23 earnings with a market cap of Rs 3,307 crore post-issue of equity shares.

Other details

The company is the eighth-largest hotel chain with asset ownership in India. It operates hospitality assets under its own brands, The Park, The Park Collection, Zone by Park among others.

It has a long-standing expertise of over five decades in the hospitality business of owning and operating hotels. It operates 27 hotels across luxury boutique upscale and upper midscale brands. The company operates 80 restaurants, nightclubs and bars, offering a wide selection of culinary experiences within its hotels, as of March 2023. The sale of food and beverages, together with the sale of wine and liquor contributed Rs 228 crore to total income in FY23.

The company has also established a presence in the retail food and beverage industry through the retail brand ‘Flurys’.

Proceeds from the fresh issue are proposed to be utilised towards repayment of debt in part or full and other general corporate purposes.

For the six months ended September 2023, the company has reported revenue growth of 14% to Rs 272 crore. Profit after tax increased 24% to Rs 22.9 crore.

The Park hotels recorded a RevPAR of approximately Rs 557 crore, an occupancy rate of 91.77% and an average room per revenue of Rs 6070 for the year ended March 2023.

JM Financial, Axis Capital and ICICI Securities are acting as the book-running lead managers to the issue, while Link Intime India is the registrar.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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