Samhi Hotels lists at Rs 134.50, only 7% premium to IPO price

The initial public offer (IPO) of the loss making hotel chain had seen a subscription of 5.57 times, largely on back of qualified institutional buyers

Samhi Hotels saw a lukewarm listing on bourses on September 22, debuting at 6.75 percent to issue price. The stock started trading at Rs 134.50 on the NSE and Rs 130.55 on the BSE, against issue price of Rs 126.

The initial public offer (IPO) of the loss making hotel chain had seen a subscription of 5.57 times, largely on back of qualified institutional buyers (QIB). The issue had not received enough support from high net-worth individuals and retail investors, who subscribed 1.22 times and 1.11 times, respectively.

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Samhi Hotels, which acquires or builds primarily business hotels, owns a portfolio of 4,801 keys across 31 operating hotels in key urban consumption centres in India as of August.

Its net loss narrowed to Rs 338.59 crore in the year ended March FY23, from Rs 443.25 in FY22, but revenue from operations more than doubled to Rs 738.57 crore, from Rs 322.74 crore during the same period. According to analysts, this is a key short-term negative for the stock.

Meanwhile, Samhi Hotels' topline has compounded at at 15.5 percent between FY20-23 compared to 7.9 percent average growth of listed peers, noted analysts at Nirmal Bang Institutional Equities.

With this issue, the company aims to deleverage its balance sheet by repaying ~Rs 1,150 crore of its total debt of Rs 2,900 crore. This is expected to improve its profitability and generate high free cash flow for the subsequent years.