Apeejay Surrendra Park Hotels IPO: Review, Valuation & GMP

Apeejay Surrendra Park Hotels Limited  - Complete Overview

If you have ever wanted to invest in hotels and restaurants, then this is your opportunity. Apeejay Surrendra Park Hotels Limited, established in 1987 is a well-established firm with investments in hospitality, tea, real estate, shipping, retail, knowledge parks, marine clusters, and logistics parks.

The group started small later expanding into hotels, real estate, construction, and pharmaceuticals. The success of the first hotel, The Park in Kolkata, led to the success of The Park in major cities across India.

Apeejay Surrendra Park Hotels, the company behind The Park Group of Hotels, ranks as the eighth largest hotel chain in India with 27 hotels and 2,111 rooms in strategic locations.

Alongside hotels, they operate 80 restaurants, bars, and nightclubs under brands like Flurys, Tantra, Someplace Else, and more.

The company owns popular restaurant brands like Zen, Lotus, Aish, and others, employing 1,923 people as of June 2023.

 

Apeejay Surrendra Park Hotels Limited Overview

Apeejay Surrendra Park Hotels Limited date is slated to be open for subscription from February 5, 2024, to February 7, 2024. This BSE, NSE IPO follows a Book Built Issue IPO.

Apeejay Surrendra Park Hotels Limited price is fixed at Rs. 147 - Rs. 155 per share. 

The total issue size of this IPO amounts to Rs.920.00 CR. The company has reserved 75% for institutional investors, 15% for non-institutional investors, and 10% for retail investors. 

 

 

Apeejay Surrendra Park Hotels Limited timetable (Tentative)

Events	Date
IPO Opening Date	5 February 2024
IPO Closing Date	7 February 2024
IPO Allotment Date	8 February 2024
Refund initiation	9 February 2024
IPO Listing Date	12 February 2024

 

Apeejay Surrendra Park Hotels Limited Details

IPO Opening & Closing Date	5 February to 7 February 2024
Face Value	Rs.1 per share
Issue Price	Rs. 147 - Rs. 155 per share
Lot Size	96 Shares
Price of 1 lot	Rs.14,880
Total Issue Size	[-] shares (aggregating up to Rs.920.00 CR)
Offer for sale	[-] shares of Rs.1 (aggregating up to Rs.320.00 CR)
Fresh issue	[-]shares (aggregating up to Rs.600.00 CR)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Private Ltd

 

 

Apeejay Surrendra Park Hotels Limited Lot Details

Application	Lot	Shares	Amount
Minimum Lot Investment (Retail)	1 lot	96	Rs.14,880
Maximum Lot Investment (Retail)	13 lot	1248	Rs.93,440
Minimum Lot Investment (HNI)	14 lot	1,344	Rs.2,08,320
Maximum Lot Investment (HNI)	67 lot	6,432	Rs.9,96,960

 

Apeejay Surrendra Park Hotels Limited Reservation

QIB Shares Offered	Maximum 75%
Retail Shares Offered	Minimum 10%
Other Shares Offered	Minimum 15%

 

Company Financial

The company improved its finances in FY 23, with more assets, higher revenue, and a positive profit. It also increased net worth and borrowings.

(Amount in Crore)

Period	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Total Assets	1,382.51	1,361.79	1,275.18
Total Revenue	272.31	524.43	267.83
PAT	22.95	48.06	-28.20
Net worth	578.71	555.68	508.51
Reserve & Surplus	561.24	538.22	491.05
Total Borrowings	597.09	566.88	622.68

 

Revenue Distribution Segment-Wise          

In FY 23 (as of Sep 30), revenue came from travel agents, their own website, walk-ins, and airline crew, excluding quarantine and medical bookings compared to FY 22.

(in % age)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Online through Travel agent	55.30%	48.67%	54.63%
Bookings through their own website	2.58%	3.70%	2.78%
Walk-in and direct bookings	36.62%	43.21%	31.33%
Airline crew	5.51%	4.42%	2.60%
Quarantine and Medical bookings	-	-	8.65%
Total	100%	100%	100%

 

Revenue by Operations

Apeejay Surrendra Park Hotels Limited reported increased revenue from customer contracts and other operating income in FY 23 compared to FY 22.

(Amount in Lakhs)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Revenue from  contracts with customers	2,644.12	5,061.30	2,550.20
Other Income	79.00	183.00	128.10
Total Revenue	2,723.12	5,244.30	2,678.30

 

 

The Objective of the Issue

• Repayment/ prepayment, in full or in part of certain outstanding borrowings availed by the Company.

• General corporate purposes

 

Promoters and Management of Apeejay Surrendra Park Hotels Limited

1. Karan Paul.

2. Priya Paul.

3.Apeejay Surrendra Trust.

4.Great Eastern Stores Private Limited.

Pre-issue Promoter Shareholding	94.18%
Post-issue Promoter Shareholding	68.13%

 

Apeejay Surrendra Park Hotels Limited Lead Managers

• JM Financial Limited

• ICICI Securities Limited

• Axis Capital Limited

 

Peers of Apeejay Surrendra Park Hotels Limited

The company is performing well with a competitive P/E ratio and positive EPS compared to its peers.

Name of the Company	Face Value (Rs. per Share)	P/ E	EPS (Basic) (Rs.)
Apeejay Surrendra Park Hotels Limited	1	56.36	2.75
Chalet Hotels Ltd	10	54.38	9.06
Lemon Tree Hotels Ltd	10	65.30	1.45
Indian Hotels Company Limited	1	54.82	7.06
Eih Limited	2	41.75	5.03
Samhi Hotels Limited	1		-47.48

 

Evaluation

The IPO is priced within the range of Rs.147 - Rs. 155 per share.

 

Evaluation of P/E Ratio:

- Considering the FY23 EPS of Rs 2.75 from the last year, the resulting P/E ratio is 56.36x.

 

Comparative Analysis with Listed Peers:

- The highest P/E ratio is 92.34x.

- The lowest P/E ratio is 41.75x.

- The industry's average P/E stands at 73.60x.

 

As a result, the IPO price, with a P/E ratio 56.36x, seems undervalued in comparison to the industry average of 73.60x.

 

 

Dividend Policy

The company hasn't paid dividends in past fiscal years. Whether we can pay them in the future depends on factors like profits, past dividend trends, capital needs, legal restrictions, and other relevant considerations evaluated by our Board.

 

IPO's Strengths

• Focus on developing existing land and strategic capital allocation for growth.

• Diversified portfolio with hotels across India in key locations.

• Occupancy increased from 67.26% (FY 2021) to 91.77% (FY 2023), showing business resilience.

 

IPO's Weaknesses

• Seasonal and cyclical activities may impact operating results and cash flows.

• 75% of revenue comes from the top 5 hotels, making business vulnerable to changes in those areas.

• Revenue depends on corporate and leisure customers; changes in travel trends could affect demand for hotel rooms.

 

IPO GMP Today

The Latest GMP of Apeejay Surrendra Park Hotels Limited is Rs.38.

 

Conclusion

Apeejay Surrendra Park Hotels Limited presents an exciting investment opportunity in the hospitality sector. With a well-established presence in the industry, diverse business interests, and a robust portfolio of hotels and restaurants, the company is set to open its IPO for subscription from February 5 to February 7, 2024. 

Priced between Rs. 147 to Rs. 155 per share, the IPO holds a total issue size of Rs. 920.00 CR. The company's financials show positive trends, and it aims to utilise the net proceeds for debt repayment and general corporate purposes. While the IPO exhibits strengths such as strategic growth focus and increased occupancy rates, potential weaknesses include dependence on seasonal activities and revenue concentration in the top 5 hotels.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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