The initial public offering of Samhi Hotels saw muted response from investors on the first day of bidding, September 14, as the offer has received bids for 43.37 lakh shares against the issue size of 6.25 crore shares, resulting into a 7 percent subscription.
So far, retail investors provided better support to the issue compared others, buying 34 percent shares of the reserved portion, which is 10 percent of the total offer size.
High networth individuals have subscribed for two percent shares of their portion which is 15 percent of the offer. The portion set aside for qualified institutional buyers (QIB), which is 75 percent, was subscribed 0.005 percent.
Samhi Hotels, which acquires or builds primarily business hotels, and further upgrades properties by engaging with established branded hotel operators, is planning to raise Rs 1,370.1 crore via the public issue at the upper price band.
The price band for the offer, which closes on September 18, has been set at Rs 119-126 per share.
Click Here To Read Moneycontrol's Exclusive Note on Samhi Hotels IPO
The public issue comprises a fresh issuance of shares worth Rs 1,200 crore, and an offer-for-sale of 1.35 crore shares worth Rs 170.1 crore by three investors, namely Singapore-based Blue Chandra Pte Ltd, Goldman Sachs Investments Holdings (Asia), and GTI Capital Alpha.
Privately-held Samhi Hotels will make use of fresh issue proceeds for repaying debts amounting to Rs 900 crore. It reported outstanding debts of Rs 2,812.5 crore on a consolidated basis including Rs 142.9 crore of FCCDs as of June 2023.
The company has raised Rs 616.54 crore via several anchor investors on September 13 including Government of Singapore, Monetary Authority of Singapore, CLSA Global Markets, HSBC Global, Citigroup, Societe Generale , SBI Mutual Fund, ICICI Prudential, and Elara India Opportunities Fund.
The company that built a portfolio of 4,801 keys across 31 hotels in India within 12 years of starting the business operations has not turned into black yet as per the financials reported in the prospectus, though managed to narrow losses year after year.
Also read: Samhi Hotels IPO opens today: 10 things to know before subscribing to the Rs 1370 cr issue
Consolidated net loss stood at Rs 338.6 crore for the year ended March FY23, narrowed from Rs 443.25 crore in the previous year, backed by strong operating numbers and topline performance.
Consolidated revenue from operations grew by 129 percent on-year to Rs 738.6 crore in FY23, while the EBITDA (earnings before interest, tax, depreciation and amortisation) increased by nearly 21-fold to Rs 237.7 crore from Rs 11.4 crore and the margin expanded sharply to 32.2 percent from 3.54 percent during the same period.
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