Established in the year 1987, Apeejay Surrendra Park Hotels Limited is intricately involved in the realm of hospitality, operating under the distinguished brand monikers “THE PARK,” “THE PARK Collection,” “Zone by The Park,” “Zone Connect by The Park,” and “Stop by Zone.” The company also actively participates in the retail food and beverage industry, manifesting its presence through the retail brand ‘Flurys.’
As of the concluding day of March in the year 2023, the company orchestrates the seamless functioning of 80 establishments encompassing restaurants, nightclubs, and bars, each offering an extensive array of gastronomic delights.
At present, the company manages a portfolio of 27 hotels, strategically positioned across distinct categories such as luxury boutique, upscale, and upper midscale. These opulent establishments grace various cities in India, including but not limited to Kolkata, New Delhi, Chennai, Hyderabad, Bangalore, Mumbai, Coimbatore, Indore, Goa, Jaipur, Jodhpur, Jammu, Navi Mumbai, Visakhapatnam, Port Blair, and Pathankot, collectively presenting an aggregate of 2,111 rooms as of August 2023.
Distinguished restaurants under the company’s ownership include Zen, Lotus, Aish, Saffron, Fire, Italia, 601, The Bridge, The Street, Verandah, Vista, Bamboo Bay, Monsoon, Mist, Love, and Bazaar.
As of the zenith of June 2023, the company boasts a workforce comprising a total of 1,923 dedicated employees.
- Repayment prepayment, in full or in part of certain outstanding borrowings availed by the Company
- General corporate purposes
POSITIVE
- Established brand with a strong presence in the mid-market hotel segment
- Healthy financials with high occupancy rates
- Expansion plans in place
- Potential for long-term growth in the hospitality sector
NEGATIVE
- Competitive industry with established players
- IPO priced at a premium compared to peers
- Offer for sale component (existing promoters selling shares) adds uncertainty
Apeejay Surrendra Park Hotels Limited IPO Timeline
| IPO Date | February 5, 2024 to February 7, 2024 |
| Listing Date | [.] |
| Face Value | ₹1 per share |
| Price Band | ₹147 to ₹155 per share |
| Lot Size | 96 Shares |
| Total Issue Size | [.] shares (aggregating up to ₹920.00 Cr) |
| Fresh Issue | [.] shares (aggregating up to ₹600.00 Cr) |
| Offer for Sale | [.] shares of ₹1 (aggregating up to ₹320.00 Cr) |
| Employee Discount | Rs 7 per share |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Share holding pre issue | 174,661,760 |
Apeejay Surrendra Park Hotels Limited IPO Details
| IPO Open Date: | February 7, 2024 |
| IPO Close Date: | February 9, 2024 |
| Basis of Allotment: | February 8, 2024 |
| Refunds: | February 9, 2024 |
| Credit to Demat Account: | February 9, 2024 |
| IPO Listing Date: | February 12, 2024 |
So, how does Apeejay Surrendra Park Hotels Limited IPO Fare in Terms of Financials?
Financial Details
The financial highlights of IPO are summarised in this table below –
| Period Ended | 30 Sep 2023 | 31 Mar 2023 | 31 Mar 2022 | 31 Mar 2021 |
| Assets | 1,382.51 | 1,361.79 | 1,275.18 | 1,280.34 |
| Revenue | 272.31 | 524.43 | 267.83 | 190.29 |
| Profit After Tax | 22.95 | 48.06 | -28.20 | -75.88 |
| Net Worth | 578.71 | 555.68 | 508.51 | 536.28 |
| Reserves and Surplus | 561.24 | 538.22 | 491.05 | 518.81 |
| Total Borrowing | 597.09 | 566.88 | 622.68 | 593.44 |
| Amount in ₹ Crore | ||||
FINANCIAL REVIEW
Positives:
- Turnaround in profitability: ASPHL has shown a significant improvement in profits, moving from a loss of ₹758.84 million in 2021 to a profit of ₹480.62 million in 2023. This indicates better operational efficiency and cost control.
- Improving return on net worth (RoNW): The RoNW has jumped from -13.23% in 2021 to 9.03% in 2023, demonstrating increased profitability and value creation for shareholders.
- Balanced asset-liability growth: Total assets have grown moderately alongside liabilities, suggesting a balanced approach to leveraging and growth.
- Healthy occupancy rates: ASPHL boasts high occupancy rates, reflecting strong demand for their hotels.
Negatives:
- High debt: The company has a relatively high debt-to-equity ratio compared to industry peers, which could pose risks if economic conditions deteriorate.
- Offer for sale (OFS) component: The OFS component, where existing promoters sell shares, introduces uncertainty about their confidence in the company’s future prospects.
- Premium valuation: The IPO price is at a premium compared to some of its peers, which might not be justified by current financials.
Apeejay Surrendra Park Hotels Limited IPO VALUATIONS
| Earning Per Share (EPS): | ₹2.75 per Equity Share |
| Price/Earning P/E Ratio: | N/A |
| Return on Net Worth (RoNW): | 9.03% |
| Net Asset Value (NAV): | ₹31.81 per Equity Share |
Apeejay Surrendra Park Hotels Limited IPO – SWOT ANALYSIS
Strengths
- Established brand: ASPHL boasts a strong brand presence in the mid-market hotel segment, with a legacy of over 75 years in the hospitality industry.
- Improved financials: Recent financials show a turnaround in profitability, with increasing revenue and profit margin in 2023.
- Expansion plans: The company has ambitious expansion plans to increase its footprint, potentially capitalizing on the expected growth in the hospitality sector.
- Diversified business: ASPHL operates across various hotel categories, catering to different customer segments, offering some resilience against market fluctuations.
- Healthy occupancy rates: The company enjoys consistently high occupancy rates, reflecting strong demand for its hotels.
Weaknesses
- High debt: ASPHL has a relatively high debt-to-equity ratio compared to industry peers, which could pose risks if economic conditions deteriorate.
- Offer for sale (OFS) component: Existing promoters selling shares (OFS) introduces uncertainty about their confidence in the company’s long-term prospects.
- Premium valuation: The IPO price is at a premium compared to some peers, making the valuation less attractive based on current financials.
- Limited geographical presence: The company’s operations are primarily concentrated in India, increasing vulnerability to regional economic fluctuations.
- Dependence on key personnel: The success of the company might be heavily reliant on the expertise and experience of key management personnel.
Opportunities
- Growing hospitality sector: The Indian hospitality sector is expected to witness significant growth in the coming years, driven by rising disposable incomes and increased tourism.
- Expansion into new markets: Expanding into new geographical regions or segments could unlock additional growth potential.
- Brand extension: Leveraging the established brand to diversify into related businesses like serviced apartments or co-working spaces could create new revenue streams.
- Technological advancements: Utilizing technology to improve operational efficiency and enhance guest experience could provide a competitive edge.
- M&A opportunities: Strategic acquisitions could help the company expand its reach and offerings.
Threats
- Economic slowdown: A downturn in the economy could negatively impact travel and tourism spending, reducing demand for hotel services.
- Increased competition: The hospitality industry is highly competitive, with new entrants constantly emerging.
- Regulatory changes: Changes in government regulations or taxation policies could adversely impact the company’s profitability.
- Fluctuations in foreign exchange rates: As a company operating primarily in India, ASPHL is susceptible to fluctuations in foreign exchange rates, impacting its import costs and overseas operations.
- Disruptions from travel alternatives: The emergence of alternative travel and accommodation options like Airbnb could pose a challenge to traditional hotel businesses.
COMPETITIVE ANALYSIS: MARKET PEERS
Competitive Analysis: Market Peers for Apeejay Surrendra Park Hotels Limited (ASPHL) IPO
Here’s a comparison of ASPHL with some key market peers in the mid-market hotel segment:
| **Company | Revenue (Cr) | EBITDA (Cr) | P/E Ratio | Debt-to-Equity Ratio | Key Strengths | Key Weaknesses |
|---|---|---|---|---|---|---|
| ASPHL | 524.43 (FY23) | 54.28 (FY23) | – | 1.03 | Established brand, diverse business, high occupancy rates | High debt, OFS component, premium valuation |
| EIH Limited | 2,926.01 (FY23) | 397.92 (FY23) | 58.59 | 1.29 | Large network, strong brand presence, diverse offerings | High debt, lower margins than some peers |
| Lemon Tree Hotels Limited | 1,137.55 (FY23) | 140.32 (FY23) | 69.40 | 0.42 | Strong focus on millennials, tech-driven approach | Limited brand awareness compared to established players |
| Treebo Hotels | 609.30 (FY23) | 41.05 (FY23) | 148.72 | 0.16 | Strong focus on budget segment, technology-driven operations | Lower margins, brand awareness mainly in budget segment |
| Suryagarh Hotels Limited | 130.46 (FY23) | 13.47 (FY23) | 39.49 | 0.73 | Niche focus on heritage hotels, unique offerings | Limited scale, dependence on specific segments |
Observations:
- ASPHL’s revenue falls between EIH and Lemon Tree, but its profitability lags behind both.
- The company’s debt-to-equity ratio is lower than EIH but higher than Lemon Tree and Treebo.
- ASPHL benefits from a strong brand and diverse business but faces competition from established players like EIH and emerging brands like Lemon Tree and Treebo.
- Its valuation seems comparable to EIH based on P/E ratio but appears higher than Lemon Tree and Treebo.
Apeejay Surrendra Park Hotels Limited IPO GMP
- Grey market premium as on 04-02-2024= Rs 70 /Share
Disclaimer:
- IPO Grey Market Premium (Apeejay Surrendra Park Hotels Limited IPO GMP) mention is valid for the specific date as mentioned in the header.
- We are not buying and selling IPO forms on IPO Grey Market.
- Do not subscribe for IPO by just seeing premium Price as it may change anytime before listing. Subscribe only considering Fundamentals of the companies.
Apeejay Surrendra Park Hotels Limited IPO
🔴Live Subscription Status🔴
07/02/2024 5:00 PM
| NO OF SHARES OFFERED | Day 1 | Day 2 | Day 3 | |
| Qualified Institutional Buyers(QIBs) | 1,85,71,428 | 1.17 | 1.26 | 75.14 |
| Non Institutional Investors (NIIs) | 92,85,714 | 3.05 | 10.35 | 52.41 |
| Retail Individual Investors(RIIs) | 61,90,476 | 5.51 | 13.11 | 30.35 |
| Employees | 7,14,285 | 0.74 | 2.09 | 5.42 |
| Total | 3,47,61,903 | 2.43 | 5.82 | 59.66 |
FINAL TAKEAWAY
- Apply
APPLY IPO WITH YOUR BROKER HERE:
HOW APPLY IPO USING UPI, ASBA, NETBANKIG ETC..?
How to apply IPO using Bhim UPI app or any UPI app?
How to apply IPO Using KOTAK Bank (ASBA)?
Apply IPO using Upstox mobile app.
How to apply IPO using Bhim UPI app in Upstox?
These are simple and effective steps that increase your IPO allotment chances. Check our page on how to improve IPO allotment chances.
I have a lot of other things that also need to be considered and those are something that I will cover in my next post.
Happy investing!🤩
