Grand Continent Hotels Limited is coming up with an IPO consisting of a fresh issue of 62,60,400 shares worth INR 70.74 crores and an offer to sell 3,28,800 existing shares worth INR 3.72 crores. The company aims to repay borrowings, expansion of hotel properties and support general corporate purposes.   

Grand Continent Hotels IPO – Important Dates

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Grand Continent Hotels Limited IPO – Company Profile

Grand Continent operates in the mid-scale hotel sector, consisting of the upper-mid-priced, mid-priced and economy hotel segments. They seek to cater to Indian middle-class guests and business travellers and deliver differentiated yet comfortable service offerings with a value-for-money proposition. 

The company, along with the JV Partner Entities, have 16 operational hotel properties and operates a total of 753 hotel keys as of September 30, 2024, across states of Karnataka (Bengaluru/Mysuru), Tamil Nadu (Hosur), Goa (Anjuna/Morjim), Andhra Pradesh (Tirupati) and Telangana (Secunderabad).

The company’s promoter, Mr. Ramesh Siva, who is also the Chairman and Managing Director, has more than two decades of experience in the hotel and hospitality industry. He has demonstrated the ability to manage and grow operations organically and also by acquiring and integrating hotels.

Grand Continent Hotels Ltd IPO Fundamental Analysis  

• Revenue Trend: The revenue increased from ₹1,680.15 lakhs in March 2023 to ₹3,123.69 lakhs in March 2024. The revenue for the current year’s 6-month period ending September 2024 is INR 3,183.98 lakh. 
• Equity and Liabilities: Both equities and liabilities have shown a consistent increase over the periods, reflecting potential growth and expansion. However, the debt-equity ratio has decreased, indicating reduced reliance on debt financing. 
• Profitability: The profit after tax (PAT) increased from ₹103.49 lakh in March 2023 to ₹407.77 lakh in March 2024, boosting investor confidence. The profit for the period ending September 2024 is ₹ 622.37 lakh. 
• Earnings per Share (EPS): The diluted EPS increased from ₹0.70 in March 2023 to ₹2.54 in March 2024, reflecting higher earnings per share for investors. The diluted EPS for the period ending September 2024 is ₹3.74. 
• Return on Net Worth (RoNW): The RoNW has increased from -198.10% to 17.74%, indicating an increase in the company’s ability to generate returns on shareholder equity. 
• Financial Position: Total assets have increased, suggesting potential business growth. However, the current ratio has increased, indicating strengthening liquidity and potential challenges in meeting short-term obligations. 

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Grand Continent Hotels IPO Financial Analysis

Grand Continent Hotels Limited IPO Peer Comparison

Grand Continent Hotels Limited has the highest RoNW (26.67%) but lacks a P/E ratio. Royal Orchids Hotels Limited has the highest EPS (₹17.68) and strong RoNW (25.09%). Lemon Tree Hotels Limited has the highest P/E (67.79), while Sayaji Hotels Limited has the highest NAV (₹90.49).

Grand Continent Hotels Ltd IPO Objective

Grand Continent Hotels plans to utilise INR 34.08 crores from the Net Proceeds for loan repayment, INR 16.79 crores for expanding hotel properties in Chennai, Kanchipuram, Hyderabad, and Goa, and the remaining funds for general corporate purposes.

1. Repayment of borrowings: The company intends to utilise INR 34.08 crores from the Net Proceeds for partial or complete repayment of borrowings, reducing debt servicing costs, improving the debt-to-equity ratio, and enhancing future growth and expansion opportunities. 
2. Expansion of hotel properties in India: The company intends to set up new hotels on lease in different locations, i.e. Chennai, Kanchipuram, Hyderabad and Goa. For the said purpose the company plans to utilise INR 16.79 crores for the said purpose. 
3. General Corporate Purposes: The company will deploy funds for general corporate purposes, including strategic initiatives, partnerships, joint ventures, acquisitions, meeting business exigencies, facility renovation, brand promotion, liability repayment, and other operational needs to support growth and sustainability. 

Grand Continent Hotels IPO Risks And Challenges

Grand Continent Hotels Limited operates primarily on leased properties, and any inability to renew or comply with lease agreements may impact business. With 10 out of 16 hotels in Bengaluru, regional risks are significant. Changing traveller preferences and competition may also affect demand.

1. The majority of the properties are on long leases or licenses. If they are unable to comply with the terms of the lease or license agreements, renew the agreements or enter into new contracts on favourable terms, the business may be adversely affected. 

2. Out of 16 operational hotels, 10 are situated in Bengaluru.  Any adverse developments affecting these hotels or the regions in which they operate could have an adverse effect on the business. 

3. Changes in travellers’ preferences due to the cost of travel, spending habits, competition from alternative accommodation, and other factors may adversely affect the demand for hotel rooms.

Grand Continent Hotels Ltd IPO – Industry & Market Potential

The growth of domestic tourism, changing lifestyles, increasing affinity towards competitively priced branded hotels and expansion of business activity to Tier 2 & 3 cities have bolstered the popularity of Mid-market or Midscale hotels in India in the recent past. Both domestic and international hotel companies with established as well as new midscale brands have increased their presence in the country to leverage the growing demand from middle-income domestic travellers and international budget travellers, especially in Tier 2, 3 & 4 cities.

India’s mid-scale hotels market generated a revenue of INR 316.3 billion in 2023 and is projected to expand at a CAGR of 9.0% from 2023 to 2029, reaching an estimated revenue of INR 530.1 billion by the end of the forecast period.

Grand Continent Hotels Limited IPO – Type of Offer

Grand Continent Hotels Limited plans a fresh issue of 62,60,400 shares, seeking INR 70.74 crores to repay borrowings, fund capital expenditure for machinery, and support general corporate purposes. Additionally, the company proposes an offer to sell 3,28,800 existing shares worth INR 3.72 crores. 

1. Fresh Issue: The company will issue 62,60,400 new shares to raise capital, aiming to collect INR 70.74 crores. The company intends to utilise the proceeds from the fresh issue to repay borrowings, fund capital expenditure for machinery, and support general corporate purposes.
2. Offer for sale: Grand Continent Hotels Limited is offering to sell 3,28,800 existing shares worth INR 3.72 crores. The following are the details of the existing shareholder, who is also the promoter selling the shares:

Grand Continent Hotels IPO Offer Size

The Offer size of Grand Continent’s IPO is INR 74.46 crores, comprising a fresh issue of 62,60,400 shares worth INR 70.74 crores and an offer for sale of 3,28,800 shares worth INR 3.72 crores. The funds will be used for loan repayment, hotel expansion, and general corporate purposes.

Grand Continent Hotels IPO Allotment Structure 

Grand Continent Hotels Limited’s allocation will be as follows: 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) according to SEBI regulations. 3,30,000 shares are reserved for market makers. 

● Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% 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 35% 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. 

● Market Maker Reservation: A portion of shares, i.e. 3,30,000 shares, are reserved for market makers. 

Read more about Grand Continent Hotels IPO Day 1 Subscription Status

How to apply for the Grand Continent Hotels IPO?

To apply for the Grand Continent Hotels Limited IPO through Alice Blue, follow these steps:

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

1. Check for IPO Details: Once your account is active, you can check for the Grand Continent Hotels Limited IPO details in the IPO section of the Alice Blue platform.
2. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
3. Submit the Application: Confirm all your details and submit your application.

 You can apply for the Grand Continent Hotels Limited IPO at Alice Blue in just a few clicks!

Check Allotment Status: After 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 do you check Grand Continent Hotels IPO Allotment Status?

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 the 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 Grand Continent Hotels Limited IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the Grand Continent Hotels Limited 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, we request you to reach out to our customer support team at Alice Blue for detailed assistance. 

Apart from Alice Blue, there are other ways to check the allotment status of the Grand Continent Hotels Limited IPO:

● Registrar’s Website: Visit the website of MUFG Intime India Private Limited, the registrar of the Grand Continent Hotels Limited IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN, application, or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status. 

● NSE SME: You can also check the allotment status on the official websites of the National Stock Exchange (NSE) Small Medium Exchange (SME) Platform. You would need your application number and PAN to check the status. 

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

Grand Continent Hotels Ltd IPO Offer Registrar

The registrar for the Grand Continent Hotels Limited IPO is MUFG Intime India Private Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.

Contact information for the registrar: 

MUFG Intime India Private Limited

C-101, 1st Floor, 247 Park,

Lal Bahadur Shastri Marg Vikhroli (West),

Mumbai – 400083, Maharashtra, India

Website: www.linkintime.co.in

E-mail: grandcontinent.ipo@linkintime.co.in

Grand Continent Hotels SME IPO – FAQs