Blue Chandra sells Rs 130 cr shares in Samhi Hotels ahead of IPO for Rs 126 per share

As a result of the stake sale, the shareholding of Blue Chandra in privately held Samhi Hotels has reduced from 30.65 percent to 22.25 percent of the pre-offer paid-up equity share capital

Blue Chandra Pte Ltd, the subsidiary of Equity International Fund V, sold Rs 130 crore equity shares in Samhi Hotels ahead of its IPO for Rs 126 per share.

Before this stake sale, the Singapore-based investment firm Blue Chandra was the largest shareholder in the branded hotel ownership and asset management platform.

Samhi Hotels in its public announcement published in the newspaper on September 9 said that Blue Chandra, one of the selling shareholders in the company's IPO, has transferred its 1,03,17,460 equity shares, which is equivalent to 8.4 percent of the pre-offer paid-up equity (sale shares), at a price of Rs 126 per share.

Blue Chandra sold 23.8 lakh shares (1.94 percent pre-offer stake) worth Rs 30 crore to Madhuri Madhusudan Kela, wife of ace investor Madhusudan Kela, and 55.55 lakh shares (4.52 percent pre-offer stake) worth Rs 70 crore to Nuvama Crossover Opportunities Fund on September 6.

Further, San Francisco-based venture capital firm TIMF Holdings bought 23.8 lakh shares (1.94 percent pre-offer stake) worth Rs 30 crore in Samhi Hotels from Blue Chandra on September 8.

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As a result of the stake sale, the shareholding of Blue Chandra in privately held Samhi Hotels has reduced from 30.65 percent to 22.25 percent of the pre-offer paid-up equity share capital. Accordingly, now, it is the second largest shareholder after ACIC Mauritius, which holds a 30.51 percent stake in the company.

"Sale of shares by Blue Chandra does not form part of the equity shares proposed to be offered for sale by Blue Chandra in the offer-for-sale (OFS). The sale shares shall be subject to lock-in," the company said in its announcement.

As per the red herring prospectus (RHP) filing on September 5, before the above stake sale by Blue Chandra, the public issue of privately held Samhi Hotels will be opened for subscription from September 14-18.

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Possible Offer Size

The IPO comprises a fresh issuance of shares worth Rs 1,200 crore by the company and an OFS of 1.35 crore shares by three selling shareholders Blue Chandra, Goldman Sachs Investments Holdings (Asia) and GTI Capital Alpha.

Currently, Goldman Sachs Investments Holdings (Asia) holds a 17.94 percent stake in the company, GTI Capital Alpha owns 11.2 percent and Sarvara Investment Fund I has a 6.68 percent stake.

The price band is yet to be announced by the professionally-managed Samhi Hotels but if we consider the price of Rs 126 per share at which Blue Chandra sold its 8.4 percent stake then the total issue size comes to around Rs 1,370.1 crore, which may or may not be.

The company will utilise net fresh issue proceeds mainly for repaying debts amounting to Rs 900 crore and the remaining for general corporate purposes.

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As a hotel owner and asset manager, Samhi Hotels acquires or builds primarily business hotels and takes steps to further upgrade properties and engage with established branded hotel operators to allow the hotels to be appropriately positioned within the market. Subsequent to this one-time upgrade of the property, it deploys its in-house and proprietary asset management tools and capabilities to further enhance the ongoing financial and operational performance of the property.

Within 12 years of starting business operations, it has built a portfolio of 3,839 keys across 25 operating hotels in 12 key urban consumption centres in India. Post the completion of the ACIC acquisition on August 10, 2023, its portfolio has further increased to 4,801 keys across 31 operating hotels.

JM Financial and Kotak Mahindra Capital Company are the merchant bankers on the issue.