Apeejay Surrendra Park Hotels shares made a stellar debut on the stock exchanges on Monday, in an otherwise weak broader market, in line with Street expectations. The share price of Park Hotels was listed at ₹187 apiece on the BSE, up 20.6% against the initial public offering (IPO) price of ₹155 per equity share. On the NSE, the stock was listed at a premium of 20% over the issue price at ₹186 per share.
Post listing, Park Hotels shares gained as much as 21.9% to hit a high of ₹188.90 on the BSE and NSE, while the market capitalisation climbed to ₹3,770 crore. Meanwhile, the benchmark indices BSE Sensex was trading lower by nearly 200 points at 71,395, and the NSE Nifty was at 21,684, down by 98 points.
Ahead of the debut of Park Hotels of exchanges, the stock was commanding a grey market premium (GMP) of ₹38 in the unofficial market, indicating the listing price to be around ₹193 per equity share.
“The impressive debut of Park Hotels signifies strong investor confidence in the well-established hotel chain's future prospects. The company benefits from decades of experience in the hospitality industry, reflected in high occupancy rates and a proven track record of service excellence. Its expansion plans indicate exciting possibilities for future revenue growth,” says Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.
“This listing paints a hopeful picture for Apeejay Surrendra Park Hotels, but a cautious approach is still advised. Thus, those who want to book profit may exit their holdings, and those who want to hold for the long term may keep a stop loss at ₹168,” Nyati adds.
The ₹920-crore IPO of Apeejay Surrendra Park Hotels, a subsidiary of the Apeejay Surrendra Group, received strong response for its public issue, which opened for subscription between February 5-7. The lot size for the IPO was 96 shares and in multiples after that, which means the minimum application amount for retail investors was ₹14,112, and maximum was ₹193,440 for 13 lots, or 1,248 shares.
The public offer, a combination of fresh equities worth ₹600 crore and an offer for sale (OFS) of ₹320 crore, was subscribed 62.91 times amid strong demand across all three categories. The quota for retail investors was booked 32 times, while the portion set aside for qualified institutional buyers (QIB) and non-institutional investors (NII) received 79.23 times and 55.26 times bids, respectively, as per the BSE data. The Kolkata-headquartered company had reserved 75% of the issue for the QIB, 15% for high-net-worth individuals, and 10% for retail investors.
Out of the fresh equity issuance of ₹600 crore, the company intends to use ₹550 crore for repaying debts, while the remaining capital will be used to meet general corporate purposes. As of December 31, 2023, the total outstanding consolidated debt of the company stood at ₹582.28 crore.
Ahead of the IPO, Park Hotels raised ₹409.5 crore from the anchor book by allotting over 2.64 crore equity shares at the upper end of the price band at ₹155 apiece. The shares were issued to 37 anchor investors, including Generale, Citigroup Global Markets Mauritius, Integrated Core Strategies (Asia) Pte Ltd, Bajaj Allianz Life Insurance Company, SBI General Insurance Company, Kotak Mahindra Life Insurance Company, and CLSA Global Markets Pte, as per the exchange data.
Established in 1987, Apeejay Surrendra Park Hotels is the 8th largest hotel chain amongst hotel chains with asset ownership in India, as per Horwath HTL report. It runs luxury boutique hotels in India under its brand, “THE PARK”, extending it further through “THE PARK Collection” and in upper-midscale categories with its brands “Zone by The Park” and “Zone Connect by The Park”. They have also established a presence in the retail food and beverage industry through its retail brand ‘Flurys’.
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