Apeejay Surrendra Park Hotels IPO: 10 things to know before buying into Rs 920-cr issue

Apeejay Surrendra Park Hotels IPO

The Rs 920-crore public issue of Apeejay Surrendra Park Hotels will open for subscription on February 5 as a mix of a fresh issue and an offer-for-sale.

Here are 10 things to know before you subscribe to the offer:

1. IPO Dates
The IPO will open for subscription on February 5 and close on February 7, 2024.

2. Price Band
The price band for the issue has been fixed at Rs 147-155 per share.

3. Offer Details
Apeejay Surrendra Park Hotels plans to raise Rs 920 crore through the IPO. It consists of a fresh issue of shares worth Rs 600 crore and an OFS of shares worth Rs 320 crore. The anchor book will open for a day on February 2. The selling shareholders include Apeejay Pvt Ltd (Rs 296 crore), RECP IV Park Hotel Investors (Rs 23 crore) and RECP IV Park Hotel Co-Investors (Rs 1 crore).

4. Objectives of the Issue
Apeejay Surrendra Park Hotels plans to use Rs 550 crore from the net proceeds to repay certain outstanding borrowings availed by the company. The remaining funds will be used for general corporate purposes.

5. Lot Size
Investors can bid for a minimum of 96 equity shares and in multiples of 96 after that. Hence, the minimum investment by retail investors would be Rs 14,112, or 96 (lot size) x 147 (lower price band). At the upper end, the bidding amount will increase to Rs 14,880.

Also Read: Apeejay Surrendra Park Hotels sets price band at Rs 147-155 for Rs 920-cr IPO

6. Company Profile
Apeejay Surrendra Park Hotels operates in the hospitality business under the brand names The Park, The Park Collection, Zone by The Park, Zone Connect by The Park and Stop by Zone. The company is also engaged in the business of the retail food and beverage industry through its retail brand Flurys.

7. Financials
The company reported a net profit of Rs 22.95 crore with a revenue of Rs 272.31 crore for the period ended on September 30, 2023. It had a bottomline of Rs 48.06 crore with a revenue of Rs 524.43 crore for the financial year ended on March 31, 2023. As of January 2, 2024, its total outstanding borrowings amounted to Rs 582.28 crore.

8. BRLMs & Promoters
The book-running lead managers of the IPO are JM Financial, Axis Capital and ICICI Securities, while Link Intime India is the registrar. The company's promoters are Karan Paul, Priya Paul, Apeejay Surrendra Trust and Great Eastern Stores.

9. Risks
(i) The majority portion of hotel bookings originate from online travel agents and intermediaries. If they continue to gain market share compared to direct booking channels, they may be able to negotiate higher commissions for services provided or demand significant concessions which could affect the business margins.
(ii) As of January 2, 2024, total outstanding borrowings amounted to Rs 582.28 crore.
(iii) Liquidity ratios of the company for six months ended September 30, 2023, September 30, 2022, and fiscals 2023, 2022, and 2021 have been less than 1.

Also Read: Apeejay Surrendra Park Hotels' Rs 920-crore IPO to open on February 5

10. Listing DateThe basis of allotment will be finalised by February 8, shares will be credited to demat accounts by February 9 and the stock will be listed on the NSE and BSE on February 12, as per the draft IPO papers.