Apeejay Surrendra Park IPO - Review & Fundamental Analysis

Apeejay Surrendra Park IPO 

Apeejay Surrendra Park’s IPO consists of a fresh issue of shares worth INR 600 crores and an offer to sell 320 crores of existing equity shares,aggregating to INR 920 crores. The company seeks funds for repayment of borrowings, and general corporate purposes.

Apeejay Surrendra Park IPO – Important Details

Apeejay Surrendra Park IPO DateFebruary 5, 2024 to February 7, 2024
Apeejay Surrendra Park IPO Listing DateFebruary 12, 2024
Apeejay Surrendra Park IPO PriceINR 147-155 per share
Apeejay Surrendra Park IPO Lot Size96 Shares
Apeejay Surrendra Park IPO Total Issue SizeINR 920 crores
Apeejay Surrendra Park IPO Basis of AllotmentFebruary 8, 2024
Apeejay Surrendra Park IPO Initiation of RefundsFebruary 9, 2024
Apeejay Surrendra Park IPO Credit of Shares to DematFebruary 9, 2024
Apeejay Surrendra Park IPO Issue TypeBook Built Issue IPO
Apeejay Surrendra Park IPO Listing AtBSE, NSE

Apeejay Surrendra Park Hotels Ltd IPO – Company Profile

Apeejay Surrendra Park Hotels, the eighth largest in India, owns 1,300 rooms (2.80% of total inventory). With 55 years of expertise, it operates under brands like “THE PARK,” “Zone,” and “Flurys,” pioneering luxury boutique hotels and establishing a presence in F&B.

Apeejay Surrendra Park Hotels offers a diverse experience with 81 restaurants, nightclubs, and bars as of September 30, 2023. Award-winning brands like Zen, Someplace Else, Tantra, Roxy, iBar, The Leather Bar, Pasha, and Aqua enhance brand positioning and cross-selling opportunities.

Under the brand ‘Flurys,’ their F&B retail chain has a profitable track record with the second-highest EBITDA margin (17.18%) in Fiscal 2023. They operate 73 outlets nationwide, aiming to leverage hospitality expertise for strategic expansion across India.

Apeejay Surrendra Park Hotels Limited IPO – Fundamental Analysis

Apeejay Surrendra Park Hotels Limited showcases a strong financial rebound IPO with significant revenue growth, return to profitability, and improved shareholder value, marking it as a potentially attractive but cautious investment opportunity.

Revenue Growth:
The company’s revenue has grown remarkably, doubling from ₹1,788.30 million in 2021 to ₹5,061.30 million in 2023. This substantial increase reflects the company’s ability to scale operations and effectively capture market demand.

Equity Dynamics:
Equity experienced a slight dip in 2022 but rebounded to ₹5,554.62 million in 2023, suggesting the company has strengthened its financial base and shareholder equity over the period.

Expenses Management:
Expenses increased alongside revenue, from ₹2,620.24 million in 2021 to ₹4,589.63 million in 2023. The proportional increase in expenses indicates expanded operations, with the company successfully managing these costs to ensure a return to profitability.

Profitability:
Apeejay Surrendra Park Hotels Limited has successfully turned its financials around, moving from a loss of ₹758.84 million in 2021 to a profit of ₹480.62 million in 2023. This dramatic improvement strongly indicates operational efficiency and effective cost control.

Return on Net Worth (RoNW):
The RoNW has improved significantly from -13.23% in 2021 to 9.03% in 2023, demonstrating the company’s improved profitability and value creation for shareholders.

Net Asset Value (NAV) per Equity Share:
The NAV per equity share is reported at ₹31.81 in 2023, providing a tangible measure of the company’s per-share value to its shareholders.

Diluted EPS (Earnings Per Share):
The Diluted EPS has improved from a negative ₹4.34 in 2021 to a positive ₹2.75 in 2023, reflecting the company’s recovery and profitability per share.

Assets and Liabilities:
Total assets have grown modestly from ₹12,803.39 million in 2021 to ₹13,617.90 million in 2023, while liabilities have also increased. The company’s asset growth, alongside a careful increase in liabilities, suggests a balanced approach to leveraging and growth.

Apeejay Surrendra Park Hotels Limited IPO – Financial Information

ParticularAs at 31 March 2021As at 31 March 2022As at 31 March 2023
Revenue (₹ in Million)1,788.302,550.205,061.30
Equity (₹ in Million)5,362.025,083.305,554.62
Expenses (₹ in Million)2,620.243,096.194,589.63
Profit and Loss After Tax (₹ in Million)(758.84)(282.02)480.62
RoNW (%)(13.23)(5.40)9.03
NAV per Equity Share (₹)31.81
Diluted EPS only (₹)(4.34)(1.61)2.75
Total Assets (in million)12,803.3912,751.7613,617.90
Total Liabilities (in million)7,441.377,668.468,063.28

Apeejay Surrendra Park IPO Peer Comparison

Apeejay Surrendra Park Hotels Limited, with revenue of ₹5,061.30 lakhs and a RoNW of 8.65%, stands out for its robust recovery. It contrasts with Indian Hotels Company Limited, which boasts higher revenue of ₹58,099.10 lakhs, a P/E of 65.67, and a RoNW of 13.19%.

CompanyRevenue (₹ in lakhs)Face Value per Equity Share (₹)P/EEPS (Basic ₹)       EPS (Diluted) (₹)RoNW (%)NAV per Equity Share (Basic) (₹)
Apeejay Surrendra Park Hotels Limited5,061.301NA2.752.758.6531.81
Chalet Hotels Limited11,284.671079.789.069.0612.0375.20
Lemon Tree Hotels Limited8,749.901092.341.451.4516.4610.78
Indian Hotels Company Limited58,099.10165.677.067.0613.1956.02
EIH Limited20,188.10256.595.035.039.7553.96
SAMHI Hotels Limited9,328.091NA(47.48)(47.48)NA547.32

Apeejay Surrendra Park IPO Objective

The main objective of Apeejay Surrendra Park is to pay in whole or in part for certain outstanding borrowings.

1.    Repayment/prepayment, in whole or in part of certain outstanding borrowings availed by the company: The company proposes to utilize an estimated amount of INR 550 crores from the Net Proceeds towards full or partial repayment or prepayment of certain outstanding borrowings availed by the company. The company aims at repayment, which enhances the company’s financial health, lowers costs, and boosts expansion capacity.

2.   General Corporate Purposes: The company aims to deploy the balance funds towards the general corporate goal, including Expenses covering capital, business, personnel, rent, administration, insurance, taxes, and maintenance.

Apeejay Surrendra Park IPO  Risks and Challenges

Apeejay Surrendra Park’s risks include delays in hotel development, challenges in constructing serviced apartments, and past/future non-compliance with financing agreements that pose threats, impacting business, operations, and financial stability.

  • The company faces risks from hotel and land development delays, impacting business operations, financial conditions, and cash flows. Construction delays in new buildings or property expansion may have adverse effects.
  • Constructing serviced apartments at EM Bypass, a unique project without prior company experience, introduces potential complexities and uncertainties in the development process. 
  • Past non-compliance with financing agreement covenants and delays in loan repayment pose potential threats. If not waived, future breaches or repayment delays could adversely impact the company’s business, operations, cash flows, and financial condition.

Apeejay Surrendra Park Hotels Limited IPO – Industry & Market Potential

The Indian food services sector includes unorganized (local restaurants, roadside eateries) and organized players (QSRs, cafés, bars, fine dining). The organized segment grows due to quality assurance and control over the food supply chain, while unorganized entities maintain a substantial share.

The Indian food services industry, valued at Rs.4.6 trillion in fiscal 2020, rebounded in fiscal 2023 with 25-30% YoY growth to Rs.4.1-4.3 trillion, driven by increased mobility and discretionary spending post-pandemic challenges.

The Indian bakery market surged from Rs.603 billion (fiscal 2018) to Rs.919 billion (fiscal 2022), with an 11% CAGR. They were expected to reach Rs.1,800-1,850 billion by fiscal 2028, driven by rising income, rural expansion, premiumization, lifestyle shifts, and new product launches.

Apeejay Surrendra Park Hotels Ltd IPO – Type of Offer

Apeejay Surrendra Park plans a fresh issue of shares, seeking INR 600 crores to augment the capital needs of the company. Additionally, the company proposes an offer for sale, intending to sell 320 crore existing shares.

1.  Fresh Issue: The company will issue new shares to raise capital, aiming to collect INR 600 crores. The company intends to utilize the proceeds from the fresh issue for repayment, prepayment, and general corporate purposes.

2.  Offer for sale: Apeejay Surrendra Park is offering to sell 320 crore existing shares. The following is the detail of the existing shareholder who is also the promoter selling the shares:

Name of the promoter selling shareholderMaximum number of offered shares for sale (in million)
Apeejay Private Limited2,960

Apeejay Surrendra Park Hotels Limited IPO Offer Size

The size of the offer of Apeejay Surrendra Park is valued at INR 920 crores. This comprises a new issuance of shares totaling INR 600 crores and the sale of 320 crores of existing equity shares. The funds generated will be utilized for repayment, prepayment, and general corporate purposes.

Apeejay Surrendra Park IPO Allotment Structure

Apeejay Surrendra Park allocation will be as follows: 75% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 10% for Retail Individual Investors (RII) in accordance with SEBI regulations. A portion of the issue is also set aside for the eligible employees.

Qualified Institutional Buyers (QIB): As per SEBI regulations, 75% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

Retail Individual Investors (RII): The remaining 10% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs.

Eligible Employees: A portion of the issue is reserved for eligible employees.

How to apply for an Apeejay Surrendra Park IPO?

To apply for the Apeejay Surrendra Park IPO through Alice Blue, you would typically follow these steps:

1. Open a Demat and Trading Account: If you don’t have one already, you would need to open a Demat and trading account with Alice Blue.

2. Check for IPO Details: Once your account is active, you can check for the Apeejay Surrendra Park IPO details in the IPO section of the Alice Blue platform.

3. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.

4. Submit the Application: Confirm all your details and submit your application.

 You can apply for Apeejay Surrendra Park Limited’s IPO at Alice Blue [M1] in just a few clicks!

Check Allotment Status: Post the allotment process, you can check the allotment status to see if you have received any shares.

Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.

How to Check Apeejay Surrendra Park IPO Allotment Status on Alice Blue?

Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:

1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app.

2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.

3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.

4. Select the Apeejay Surrendra Park IPO: If you have applied for multiple IPOs, there might be a dropdown menu or lists where you can select the IPO you are interested in. Select the Apeejay Surrendra Park IPO.

5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.

 If you face any issues, it’s recommended to contact Alice Blue’s customer support for detailed assistance.

Apart from Alice Blue, there are other ways to check the allotment status of the Apeejay Surrendra Park IPO:

Registrar’s Website: Visit the website of Link In time India Private Limited, the registrar of the Apeejay Surrendra Park IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN and application number or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.

NSE and BSE: You can also check the allotment status on the official websites of the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). You would need your application number and PAN to check the status.

Please note that the allotment status will only be available after the allotment process has been completed, a few days after the IPO window closes.

Apeejay Surrendra Park IPO Offer Registrar

The registrar for the Apeejay Surrendra Park IPO is Link Intime India Private Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.

Contact information for the registrar:

Link In time India Private Limited

C-101, 1st Floor, 247 Park, Lal Bahadur Shastri Marg,

Vikhroli (West),

Mumbai – 400 083,

Maharashtra, India

Telephone number: +91 810 811 4949

E-mail: [email protected]

Website: www.linkintime.co.in

Apeejay Surrendra Park IPO FAQs

1. What is the allotment date of the Apeejay Surrendra Park IPO?

The allotment date of Apeejay Surrendra Park IPO is February 8, 2024.

2. What is the price band of the Apeejay Surrendra Park IPO?

The price band of the Apeejay Surrendra Park IPO shares issued by the company is INR 147-155 per share.

3. What is the size of the Apeejay Surrendra Park IPO?

Apeejay Surrendra Park’s IPO consists of a fresh issue of shares worth INR 600 crores and an offer to sell 320 crores of existing equity shares. The company seeks funds for repayment, prepayment, and general corporate purposes.

4. What is the listing date of the Apeejay Surrendra Park IPO?

The listing date of the Apeejay Surrendra Park IPO is February 12, 2024. 

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