Park Hotel IPO: Files Papers with SEBI for 1050 Crore IPO
Park Hotel IPO
Park Hotel IPO: Expanding Opportunities for Growth in India’s Hospitality Sector
The Indian hospitality industry is on the cusp of witnessing a significant financial event with Park Hotel, a renowned and established hotel chain, announcing its plans to bring its Initial Public Offering (IPO) to the market.
The company has taken a significant step forward by filing the draft papers with the Securities and Exchange Board of India (SEBI), the market regulator, for approval and subsequent issuance of shares to the public.
This move is expected to raise a substantial amount of capital, with the company aiming to secure Rs 1050 crore through this IPO.
The IPO comprises a combination of fresh equity shares as well as shares offered for sale by existing shareholders, showcasing a dual approach to capital infusion and expansion.
The IPO Blueprint
Park Hotel’s IPO comprises the issuance of fresh equity shares worth Rs 650 crore, demonstrating the company’s intention to bolster its financial structure and fuel its growth ambitions.
Additionally, shares worth Rs 400 crore will be offered for sale (OFS), allowing promoters and shareholders to partially monetize their investments in the company.
The IPO is anticipated to encompass a total offering of Rs 1050 crore, reflecting the company’s strategic vision and financial goals.
The company’s promoters, APJ Surendra Trust and APJ Pvt Ltd, have outlined their plans to participate in the OFS. APJ Surendra Trust intends to sell shares worth Rs 80 crore, while APJ Pvt Ltd plans to divest shares worth Rs 296 crore.
This combined offering from promoters is a testament to their confidence in the company’s growth prospects and the potential of the Indian hospitality sector.
Notable selling shareholders include RECP IV Park Hotel Investors and RECP-IV Park Co-Investors Limited. Presently, the promoter and members of the promoter group hold an impressive 94.18 per cent stake in the company.
Additionally, both investors collectively possess a 5.82 per cent stake, signifying the trust and value they have placed in Park Hotel’s trajectory.
Furthermore, the company is considering a pre-IPO placement of up to Rs 130 crore in consultation with the book running lead managers.
Should this pre-IPO placement materialize, the size of the new issue will be adjusted accordingly.
The proceeds generated from the IPO are earmarked for the partial or full repayment of debt, in addition to supporting other general corporate purposes.
A Glimpse into Park Hotel’s Identity
Park Hotel, operating under the banner of APJ Surendra Park Hotels Limited, has made a notable impact on India’s hospitality landscape. It stands as the eighth largest hotel chain company in India based on asset ownership.
The brand has successfully etched its identity in the market through its diverse portfolio of hospitality assets, operating under distinctive brands such as The Park, The Park Collection, and Zone by Park.
With over five decades of industry experience, Park Hotel is positioned as a seasoned player in the hospitality sector.
The brand proudly owns and operates 27 hotels, primarily falling within the luxury boutique upscale brands and upper midscale category.
The company’s offerings are not limited to lodging; it also manages an impressive array of 80 restaurants, night clubs, and bars, further diversifying its revenue streams.
Intriguingly, the food and beverage segment, including wine and liquor sales, contributed a significant Rs 228 crore to the company’s total income in the fiscal year 2022-2023.
This underscores Park Hotel’s dynamic approach to catering to customer preferences and fostering a comprehensive hospitality experience.
Financial Performance and Projections
Park Hotel’s financial performance has remained robust, bolstering its position as a reliable player in the industry.
For the fiscal year ending March 2023, the company reported a revenue of Rs 524 crore, accompanied by a profit of Rs 48 crore during the same period. Such consistent performance reflects the brand’s focus on operational excellence and strategic decision-making.
Looking ahead, Park Hotels projects strong operational metrics for the same fiscal year. An impressive Revenue Per Available Room (RevPAR) of approximately Rs 557 crore is projected, accompanied by an occupancy rate of 91.77 per cent and an average revenue per room of Rs 6.
These figures underscore the company’s commitment to offering a premium experience to its patrons.
IPO Advisory Team
The forthcoming IPO is backed by a proficient advisory team. JM Financial and Axis Capital are acting as the book running lead managers for the issue.
Their expertise and guidance are pivotal in ensuring a seamless IPO process, attracting investor interest, and facilitating efficient capital raising.
Link Intime India serves as the registrar, playing a crucial role in managing the IPO application process, allotment of shares, and maintaining transparency in the entire proceedings.
Final Words
The Park Hotel IPO marks a significant milestone in the company’s journey, presenting an opportunity for investors to be a part of India’s thriving hospitality sector.
With its rich legacy, diverse offerings, and robust financial performance, Park Hotel is poised to continue its growth trajectory in the coming years.
The IPO not only signifies the company’s commitment to expansion but also reflects its confidence in the market’s appetite for quality hospitality offerings.
As the IPO process unfolds, all eyes are on the company’s execution and the response it garners from investors, further shaping the narrative of Park Hotel’s future in the Indian hospitality landscape.
