Apeejay Surrendra Park Limited’s IPO is scheduled to open for subscription on February 5, 2024. The company operates in the hospitality sector in India. Although it was in the red in FY21 and FY2022, it has been in the black since FY2013. In this article: A.P.J. Surendra Park IPOincluding information, reviews and analysis about the company, financials, IPO valuation, and gray market premium (GMP).
A.P.J. Surendra Park IPO Details
| IPO start date | February 5, 2024 |
| IPO deadline | February 7, 24 |
| IPO listing date | February 12, 2024 |
| Type of problem | Book Built Issue IPO |
| face value | 1 rupee per share |
| IPO price range | 147 to 155 rupees per share |
| lot size | 96 stocks |
| Exhibition location | BSE and NSE |
| Total issue size | Rs. 920 million dollars |
| Latest issue | Rs. 600 million |
| OFS | Rs. 320 million |
| employee discount | 7 rupees per share |
About A.P.J. Surendra Park Limited
Apeejay Surrendra Park Hotels Limited is engaged in hospitality business operating under the brand names ‘THE PARK’, ‘THE PARK Collection’, ‘Zone by The Park’, ‘Zone Connect by The Park’ and ‘Stop by Zone’. I’m here.
It also operates a food and beverage retail business through its retail brand Flurys.
As of the end of the last financial year, we operated 80 restaurants, nightclubs and bars, offering a wide range of culinary experiences.
It currently operates 27 hotels across various categories such as luxury boutiques, luxury hotels and upper midscale hotels in Kolkata, New Delhi, Chennai, Hyderabad, Bangalore, Mumbai, Coimbatore, Indore, Goa and Jaipur. , Jodhpur, Jammu, Navi Mumbai, Visakhapatnam, Port Blair, Pathankot.
It owns restaurants under the following brand names: Zen, Lotus, Aish, Saffron, Fire, Italia, 601, The Bridge, The Street, Verandah, Vista, Bamboo Bay, Monsoon, Mist, Love, and Bazaar.
Financial overview of Apeejay Surrendra Park Limited
| Period ends | March 31, 2021 | March 31, 22 | March 31, 23 | September 30, 23 |
|---|---|---|---|---|
| assets | 1,280.34 | 1,275.18 | 1,361.79 | 1,382.51 |
| revenue | 190.29 | 267.83 | 524.43 | 272.31 |
| Profit after tax | -75.88 | -28.20 | 48.06 | 22.95 |
| net worth | 536.28 | 508.51 | 555.68 | 578.71 |
| reserves and surplus | 518.81 | 491.05 | 538.22 | 561.24 |
| Total loan amount | 593.44 | 622.68 | 566.88 | 597.09 |
A.P.J. Surendra Park IPO valuation
- The IPO price band has been set at Rs 147 to Rs 155 per share.
- Considering that the weighted EPS for the past 3 years is Rs 0.12, the resulting P/E ratio is high at 1292x, which indicates that the weighted EPS is very low as it has incurred losses in 2 out of the last 3 financial years. .
- EPS for FY2023 is 2.75 rupees and P/E ratio is 56 times.
- Annualized EPS for the six months ending September 2023 yields a P/E ratio of 59x.
- By comparison, listed peers such as Lemon Tree Hotels have a P/E ratio of up to 92x, while EIH Limited’s P/E ratio is the lowest at 56x, with the industry average P/E ratio of 74x. Therefore, the IPO price range is 56x to 59x P/E (excluding losses in FY21 and FY22), which is considered the full price.
APJ Surendra Park IPO GMP (Gray Market Premium)
According to IPO Watch, the gray market premium (GMP) for Arpeejay Surendra Park Hotels IPO stands at Rs 25.
Data from Investorgain shows a change in GMP, which rose from Rs 25 to Rs 44 between January 31 and February 1, 2024.
A.P.J. Surendra Park IPO – Positive aspects
- The company has built a successful hospitality brand through product innovation and service excellence, and has captivated customers with its diverse and comprehensive offerings.
- The company maintains a diversified pan-India portfolio that owns, leases and manages hotels strategically located across metropolitan areas and emerging cities.
- The company boasts high occupancy and REVPAR (revenue per available room), as well as strong financial and operational performance.
- Strong contributions from the Food & Beverage (F&B) and Entertainment segments provide stable and non-cyclical revenue growth, complementing the core hotel business.
A.P.J. Surendra Park IPO – Risk Factors
- An IPO includes both an Offer for Sale (OFS) and a new issue component. OFS’s proceeds will go to the selling shareholders rather than the company.
- Risks include delays in hotel real estate and land development, which could impact our business, operations and finances.
- construction risks associated with EM Bypass’s serviced apartments; This is a project in which the company has no experience.
- Past failures to comply with the terms of loan agreements or delays in loan repayments could have an adverse effect on our business.
- Delays or disputes in the payment of statutory dues may result in financial penalties and may affect our financial position and cash flow.
- The majority of hotel reservations are made through online travel agencies. Increasing market share by intermediaries may affect trading terms.
- Past adjusted losses pose risks to future financial conditions.
- Significant room revenue is derived from corporate and leisure customers. Changes in travel preferences can impact demand and finances.
- Investors should consider all risk factors set out below. IPO RHP
Apeejay Surrendra Park IPO Review and Conclusion
- The company’s business has been profitable since FY23, with a successful hospitality brand with a diverse portfolio of hotels and restaurants across India, contributing to stable revenues.
- On the other hand, IPOs are fully priced and risks include delays in real estate development, compliance issues, reliance on online travel agencies, and past adjusted losses.
Investors who understand all the risk factors can invest in this IPO.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. He has been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
