Apeejay Surrendra Park Hotels Limited -IPO DETAILS
| IPO Date | Feb 05, 2024, to Feb 07, 2024 |
| Price Band | ₹147 to ₹155 per share |
| Lot Size | 96 Shares |
| Issue Size | ₹920.00 Cr. |
| Allotment Date | 08 February 2024 |
| Listing Date | 12 February 2024 |
Company Overview
Apeejay Surrendra Park Hotels (ASPH) Group stands as the 8th largest hotel chain in India based on asset ownership, boasting a wealth of experience spanning over five decades in the hospitality sector. The company presently manages 30 luxury upscale hotels strategically located in major Indian cities like Kolkata, New Delhi, Chennai, Hyderabad, Bangalore, and Mumbai.
ASPH’s diverse brand portfolio caters to distinct market segments:
- The PARK: An upscale brand designed for affluent high-income earners, emphasizing unique experiences, design, and style.
- The PARK Collection: Comprising small luxury properties in select destinations.
- Zone & Zone Connect by The Park: Targeting the upper midscale level, offering a harmonious blend of affordability and luxury.
- Stop by Zone: An economical motel brand focused on providing budget-friendly and convenient accommodation.
In addition to its hotel operations, ASPH has made inroads into the retail food and beverage industry through the Flurys brand. The company manages 81 establishments, including restaurants, nightclubs, and bars, featuring a diverse range of brands such as Zen, Someplace Else, Tantra, Roxy, iBar, The Leather Bar, Pasha, and Aqua.
Objective of the IPO
Here are a few quick reasons why company is going public:
1. The net proceeds amounting to Rs. 550 Cr will be allocated for the prepayment of the company’s lenders.
2. The residual funds will be earmarked for general corporate purposes.
Company Financials
| Period Ended | Total Assets | Total Revenue | Profit After Tax | Net Worth | Reserves and Surplus | Borrowings |
| 31-Mar-21 | 1280.34 | 190.29 | -75.88 | 536.28 | 518.81 | 593.44 |
| 31-Mar-22 | 1275.18 | 267.83 | -28.20 | 508.51 | 491.05 | 622.68 |
| 31-Mar-23 | 1361.79 | 524.43 | 48.06 | 555.68 | 538.22 | 566.88 |
Key Performance Indicator
| Market Cap. (Cr.) | 3307 | EPS (Rs) | 2.75 |
| RoNW | 9.03% | Debt/Equity | 0.99 |
Pros
- The management has carefully analyzed the market demographics and introduced multiple brands targeting each segment.
- With a nationwide presence, particularly in metro cities, the company positions itself to capitalize on the robust economic activities unfolding across India
- Despite the challenges posed by the pandemic, the company has successfully maintained commendably high occupancy rates. This resilience indicates the company’s potential for substantial earnings growth as it expands its portfolio, while simultaneously sustaining impressive occupancy rates.
- The management has adeptly diversified the business, ensuring that no more than half of the revenue is derived from hotel rooms. This deliberate diversification shields the company from the cyclical nature of the hotel business, enabling it to generate consistent returns over time.
Cons
- The company has a historical record of postponing its repayments, with delays extending up to 88 days, and at times, breaching covenants established by the lender. While these breaches were confined to FY21, they pose a noteworthy risk that necessitates attention.
- A substantial portion, approximately 80%, of the company’s revenue is reliant on corporate and leisure bookings. This heavy dependence exposes the company to potential revenue fluctuations in the event of an economic downturn, impacting the earnings from this segment.
- In FY22, ICRA downgraded the company’s Term Loans and Fund-based limits. Such downgrades can significantly elevate the company’s interest costs, presenting an additional financial challenge that needs careful consideration.
How to Apply for this IPO
1. Go to https://ipo.adityatrading.in/
2. Enter your Client ID
3. Enter the OTP received in your registered mobile number.
4. Choose the IPO and click on apply button.
5. Enter the UPI ID, Quantity, and Cut off the price.
6. Click on submit button
7. Confirm the mandate request received on your phone by entering the UPI Pin.
You can also watch our youtube video on “How to Apply on IPO” by clicking on the link “https://www.youtube.com/watch?v=1qOI8dCpl1I&ab_channel=ATS”
