Explain Apeejay Surrendra Park Hotels IPO in 500 words
Apeejay Surrendra Park Hotels, commonly known as The Park Hotels, is a luxury hotel chain in India. In 2017, the company decided to go public and launched its initial public offering (IPO) to raise funds for expansion and other business activities.
The IPO of Apeejay Surrendra Park Hotels was launched on 30th March 2017 and closed on 4th April The company aimed to raise around Rs. 1,000 crore ($150 million) through this IPO. The IPO consisted of a fresh issue of shares worth Rs. 400 crore ($60 million) and an offer for sale of shares worth Rs. 600 crore ($90 million) by the existing shareholders.
The issue price for the IPO was fixed at Rs. 345 to Rs. 350 per share. The minimum lot size for the IPO was 42 shares, and investors could apply for a maximum of 14 lots. The IPO received a good response from investors, and it was oversubscribed by more than 38 times. The retail portion of the IPO was oversubscribed by 1.8 times, while the institutional and non-institutional portions were oversubscribed by 1.36 times and 1.23 times, respectively.
The proceeds from the IPO were planned to be utilized for various purposes. A major portion of the funds, around Rs. 315 crore ($47 million), was earmarked for repayment of loans and other borrowings. The company also planned to use around Rs. 270 crore ($40 million) for renovation and refurbishment of existing hotels. Additionally, a part of the funds was allocated for general corporate purposes and working capital requirements.
Apeejay Surrendra Park Hotels is known for its luxurious and contemporary hotels located in prime locations across India. The company operates a total of 22 hotels, including 11 owned hotels and 11 managed hotels. The hotels are spread across various cities like Kolkata, Chennai, Bengaluru, Hyderabad, Mumbai, and New Delhi. The Park Hotels brand is known for its stylish design, personalized service, and unique guest experiences.
The IPO of Apeejay Surrendra Park Hotels was seen as an opportunity for investors to participate in the growth story of the Indian hospitality industry. The company had a strong track record of revenue growth and profitability. In the financial year 2015-16, the company reported a total revenue of Rs. 6 crore ($54 million) and a net profit of Rs. 1.6 crore ($240,000). The company had a debt-to-equity ratio of 0.5, indicating a healthy financial position.
The IPO of Apeejay Surrendra Park Hotels received a positive response from investors, and the stock debuted on the stock exchanges on 12th April The shares were listed at a premium of 15% to the issue price, indicating strong investor demand. The stock performed well in the initial days of listing and witnessed a significant increase in its market capitalization.
In conclusion, the IPO of Apeejay Surrendra Park Hotels was a successful event that allowed the company to raise funds for expansion and other business activities. The strong investor response and positive listing performance reflected the confidence in the company's growth prospects and the potential of the Indian hospitality industry.