SAMHI Hotels IPO opens today: Should you subscribe or skip?
Ahead of the issue opening, the company raised Rs 616.5 crore from anchor investors.
Analysts advised investors to avoid the IPO on profitability concerns and increased net borrowings.
SAMHI Hotels is a prominent hotel ownership and asset management platform in India, with the third largest inventory of operational keys (owned and leased) in the country as of February 2023.
The company acquires or builds primary hotels and thereafter renovates and rebrands the properties under its wings. All of its hotels are in the upper upscale and upscale, upper mid-scale and mid-scale hotel segments, typically operating under long-term management contracts with established and well-recognized global hotel operators.
«The company's financial performance has been poor for the last three years, but it is making progress on cutting losses.
However, business is subject to seasonal and cyclical variations that could result in fluctuations in the results of operations. Its sales multiple is 3.7X, which is below when compared to the industry average,» said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart, who has an 'Avoid' recommendation on the IPO.
The issue, which closes on September 18, comprises a fresh issuance of equity shares worth Rs 1,200 crore and an offer for sale (OFS) of up to 1.35 crore equity shares.
Under the OFS, Blue Chandra Pte will offload 84.2 lakh shares, Goldman Sachs will sell up to 49.31 lakh equity shares and GTI Capital Alpha will give up 1.4 lakh shares.
The company has fixed a price band of Rs 119-126 per equity share for its maiden public offer.
About 75% of the offer is set aside for qualified institutional buyers, 15% is reserved for non-institutional investors and 10% for retail investors.
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