Apeejay Surrendra Park Hotels
Apeejay Surrendra Park Hotels Limited is a company incorporated in 1987 engaged in the hospitality business and ranked 8th largest in India in this sector.
It currently operates under brand names like “THE PARK, THE PARK COLLECTION, ZONE BY THE PARK, STOP BY ZONE, etc. It is also engaged in the food and beverage industry under the brand name “Flurys.”
The company has around 80 hotels, restaurants, bars and nightclubs around the country. The company has luxury hotels in cities like Kolkata, Chennai, Bangalore, Hyderabad, Mumbai, New Delhi, etc.
The restaurants are currently operating under the brand names like Zen, Lotus, Aish, Saffron, Fire, Italia, etc.
Apeejay Surrendra Park Hotels IPO Key Details
- Issue Date :- 5th February,2024 to 7th February,2024
- Listing Date :- 12th February 2024
- Issue Price:- Rs. 147/- to Rs.155/-
- Lot Size:- 96 shares
- Issue size:- Rs. 920 Crore ( fresh issue – Rs.600 Crores and Offer for sale Rs.320 Crores)
- Total No. of shares issued:- 5.9 Crore shares
Industry Overview:
As the company is engaged in the hospitality industry, it offers luxurious hospitality products and services, hence the target audience is generally the high paying individuals. With the rising tourism development, the company has increased chances of an industrial boom.
Promoter:
One of the promoters of the company Ms. Priya Paul has over 35 years of experience in the hospitality sector and also holds various awards and achievements including the Padma Shri. Also, the other key managerial personnel of the company Karan Paul, Vijay Dewan and Suresh Kumar hold more than 30 years of experience in the same industry.
Objectives of issue:
Net proceeds of this issue will be majorly utilised for the repayment of the borrowings of the company and some general corporate purposes.
Key Performance Indicators
| Financial Metric | Value |
|---|---|
| EPS (FY 2022-23) | ₹2.75 |
| RoNW (FY 2022-23) | 9.03% |
| P/E (FY 2022-23) | 56.36* |
| Debt/Equity Ratio | 0.99 |
Positive points about Apeejay Surrendra Park Hotels
1. P/E ratio of Company at 56-60x is a bit low compared to Avg sectoral P/E which is at 70x ( As per Money Control). The Indian Hotels one of the peers is also trading at P/E of 60x.
2. Company is among the Top 8 in the hotel industry sector.
3. Net Worth of the company has consistent growth for past 3 years ( FY 2020-2023)
RoNW in 2022-23 is 9.03%, which looks strong.
4. Profit After Tax ( PAT) of company has consistent growth in past 3 years.
5. Promoter & Management of the company looks strong and experienced.
Risk involved while investing in Apeejay Surrendra Hotels
- The industry requires experience and personalization in order to sustain in the market. Also the consumer preferences in such kind of industry keeps on changing and this requires adaptability to the hospitality tech. However the company has consistent strategy for growth and a strong internal management.
- Growth of Company’s profitability is consistent but the company had a setback in FY 2019-20 to FY 2020-21 with regard to profits, however it might be due to Covid-19.
Conclusion:
Listing Gain:- Appejay Surrendra Park Hotels IPO looks strong for Listing gains. As per GMP, 20%+ listing gain is possible i.e. the current GMP is around Rs.60/- per share.
Long Term:- The fundamentals of the company seems to be strong and there is a potential for the company to expand as well as to sustain in the industry.
Both company’s & industry outlook looks strong for long term. Company has lot of potential to grow in this growing industry.
The fundamentals of the company looks strong as revenue is growing consistently and Company is profitable since past 1.5 years and expected to grow at same pace. Even Tourism and Hospitality industry is growing in India Rapidly which will help this Company to grow.
