Samhi Hotels IPO to open on September 14, fresh issue size revised upwards to Rs 1,200 crore

On September 14, Samhi Hotels, funded by Equity International, ACIC Mauritius, and Goldman Sachs, will conduct an initial public offering. Sources previously told Moneycontrol that the issue size is expected to be around Rs 1,400 crore, while the price range has not yet been published.

New shares worth Rs. 1,200 crore are being issued, while three existing shareholders are offering to sell 1.35 billion of their shares in an OFS.

The new size is Rs 1,200 crore, up from Rs 1,000 crore, and the OFS size is 1.35 billion shares, up from 90 million shares.

As part of the OFS, Equity International Fund V, the owner of Singapore-based Blue Chandra Pte Ltd, would sell 84.28 lakh equity shares, Goldman Sachs Investments Holdings (Asia) will sell 49.31 lakh shares, and GTI Capital Alpha will sell 1.4 lakh shares.

Selling shareholders will receive the funds from the OFS, while the business would use the net fresh issue proceeds primarily to service debts of Rs 900 crore and the remainder for general corporate purposes. The company has a total of Rs 2,812.5 crore in outstanding borrowings as of June 2023, with FCCDs accounting for Rs 142.9 crore of the total.

Samhi Hotels, a privately held company, has set aside 75% of the issue size for institutional investors, 15% for high-net-worth individuals, and 10% for the general public.

QIB's anchor book will be opened for one day on September 13, and the offer will end the following day on September 18.

Financial Performance

According to the prospectus's disclosed financials, the company is currently losing money, but its losses have been decreasing each year. The company's overall net loss decreased to Rs 338.6 crore in the fiscal year ending in March FY23 from Rs 443.25 crore the year before, thanks to robust operating numbers and top-line success.

In FY23, consolidated operating revenue increased by 129% year-over-year to Rs 738.6 crore, while EBITDA (earnings before interest, tax, depreciation, and amortisation) increased by nearly 21-fold, to Rs 237.7 crore from Rs 11.4 crore, and the margin increased dramatically, to 32.2% from 3.54 percent.

In just 12 years since opening its doors, Samhi Hotels has expanded to 25 hotels with 3,839 available rooms in 12 of India's most important commercial hubs like Bengaluru, Hyderabad, the National Capital Region, Pune, Chennai, and Ahmedabad. This number will rise to 33 hotels by the end of the current fiscal year in March 2023. A total of 4,801 rooms at 31 hotels are now part of its portfolio after the ACIC purchase closed on August 10, 2023.

In order to position its hotels effectively in the market, the company primarily buys or constructs business hotels, and then takes the necessary steps to renovate those properties and work with well-known branded hotel operators. In order to improve the property's ongoing financial and operational performance once the initial update is complete, it makes use of its in-house and proprietary asset management tools and capabilities.

Shareholding

With a 30.65 percent stake, Blue Chandra is the company's largest stakeholder. Goldman Sachs Investments Holdings (Asia) has a 17.94% interest, while ACIC Mauritius I & II own a combined 30.51 %. An 11.20% position is held by GTI Capital Alpha, while a 6.68% stake is held by Sarvara Investment Fund I.

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By September 22, the company will have finalized the basis of allotment of IPO shares in conjunction with the BSE, and by September 26, qualified investors will have received the shares in their demat accounts. Investors who were unsuccessful will have their money returned to their accounts by the 25th of September.

On September 27th, the well-known branded hotel ownership and asset management platform will make its debut on the NSE and BSE.

The issue's merchant bankers are JM Financial and Kotak Mahindra Capital Company, while the registrar is KFin Technologies.