Apeejay Surrendra Park Hotels has fixed the price band for its forthcoming initial public offer at ₹147-155 apiece. The total size of the issue is ₹920 crore of which ₹600 crore is through a fresh issue and the remainder through an offer for sale.
The anchor book will be open this Friday while the IPO will be open to the public for subscription from February 5 to 7.
Almost the entire proceeds of the issue will be used to pay down debt leaving the company free on take on leverage for its expansion plans if required.
Expanding portfolio
The hotel operator has plans to nearly double its hotels portfolio over the next 4-5 years, while it will also be expanding its confectionary chain ‘’Flurys’’.
It currently has 30 hotels that it operates under different brands and price brackets — The Park, The Park Collection, Zone by the Park, Zone Connect and Stop by Zone.
It has a total portfolio of 21 properties in the pipeline for growth and expansion representing 1,855 keys. Of this three are leased and licenced hotels and 15 are managed hotels. It is expanding two existing hotels in Visakhapatnam and Navi Mumbai and developing a land bank in Pune to develop a 380-room hotel. There are land banks in Jaipur and Kolkata where hotels and serviced apartments will be coming up.
The revenue and margins of the company will be driven by its high-end The Park brand while in terms of volume the more affordable ‘’Stop by the Zone’’ will be driving expansion, said Chairperson Priya Paul. She added that expansion would be through a mix of organic and inorganic routes, as well as through managed contracts.
The company has no property at present in Mumbai city but it is keeping an eye out for opportunities, said Managing Director Vijay Dewan.
The hotels in its portfolio have a high occupancy of over 93 per cent, contributed by corporate travel. Dewan said that business cum leisure travel, a new segment, was gaining traction.
The company is also expanding outlets under Flurys, which has its flagship outlet in Park Street, Kolkata. It currently has 73 outlets across India.
Apeejay Surrendra Park Hotels reported a net profit of ₹23 crore in the first half of FY24 on revenue of ₹264.4 crore.