The Park Hotels to launch its IPO next year
It is said that the group is planning to offload 20-25 per cent stake to the public, and the IPO s likely to be a primary and secondary issue of shares
Luxury boutique hotel chain The Park Hotels has commenced the groundwork for an initial public offer (IPO) scheduled in 2020 and has appointed advisors to help in the process. As per reports, the need for growth capital and deleveraging of the balance-sheet are likely to be the cause for the listing route taken by the hotel. The hotel has reportedly engaged ICICI Securities as the merchant banker for now and is looking to hit the markets post-March 2020. The move is still on the initial stage and there is no clarity on the valuation yet. It is said that the group is planning to offload 20-25 per cent stake to the public, and the IPO s likely to be a primary and secondary issue of shares.
As per ICRA report, the Indian hospitality industry, which experienced a prolonged downturn during FY2009–FY2015 because of excess supply in several key markets, has shown improvement (as measured by Revenue per Available Room or RevPAR) over the past two-three years. Given the context, the Apeejay Surrendra Park Hotels Ltd properties have recorded a considerable increase in both average room revenues (ARRs) and occupancy levels in FY2018 and FY2019, with ARRs increasing by 11% in FY2019 and average occupancy across the properties standing at 90% at present.
The report further stated that the share of revenue from the F&B income has historically been high for Apeejay Surrendra Park Hotels Ltd, when compared to its peers, with the share standing at around 45-46% of total revenues on an average over the period FY2013-2019, notwithstanding some decline in the quarter’s post-demonetisation due to an overall economic slowdown. With the positive trend expected to sustain over the near-to-medium term, ICRA expects the hospitality group to record increased profitability from its core operations, the report stated. However, it also added that the overall group liquidity has been impacted because of consistent operating losses suffered in the tea business in the last few years.
The Park Hotels is on a major expansion spree. It is adding around 10 more hotels with 1,239 rooms in their portfolio by the end of 2020 across the country. The forthcoming hotels will be in locations such as Indore, Pune, Vishakhapatnam, Goa, Srinagar, Amritsar, Tirupati and Vijayawada amongst others.