Samhi Hotels Limited is all set to embark on its IPO journey which opens for subscription on September 14, 2023. As a prominent player in the Indian hotel ownership and asset management sector, Samhi Hotels’ IPO has captured the attention of investors. In this comprehensive article, we will provide you with an in-depth overview of the Samhi Hotels IPO, including key dates, essential company information, the positives and negatives or risk factors, and an extensive review which would help investors to take decision to invest or not.
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Samhi Hotels IPO Details
| IPO Opening Date | 14-Sep-23 |
| IPO Closing Date | 18-Sep-23 |
| IPO Listing Date | 27-Sep-23 |
| Issue Type | Book Built Issue IPO |
| Face Value | Rs 1 per equity share |
| IPO Price band | Rs 119 to Rs 126 per equity share |
| Lot Size | 119 Shares |
| Min Order Quantity | Shares |
| Listing at | BSE and NSE |
| Total Issue Size | Rs. 1370.1 Crores |
| Fresh issue | Rs. 1200 Crores |
| OFS | Rs. 170.1 Crores |
Samhi Hotels IPO Timetable
| IPO Opens on | 14-Sep-23 |
| IPO Closes on | 18-Sep-23 |
| Basis of Allotment | 22-Sep-23 |
| Initiation of Refunds | 25-Sep-23 |
| Credit of Shares to Demat | 26-Sep-23 |
| Listing Date | 27-Sep-23 |
| Cut-off time for UPI mandate confirmation | 18-Sep-23 |
About Samhi Hotels Limited
Established in 2010, Samhi Hotels Limited specializes in branded hotel ownership and asset management, making a significant impact in India’s hospitality industry. With a diverse portfolio encompassing 4,801 keys across 31 operational hotels in 14 key urban consumption centers, including bustling cities like Bengaluru, Hyderabad, the National Capital Region (NCR), Pune, Chennai, and Ahmedabad as of March 31, 2023, the company has solidified its presence.
Samhi Hotels also has two upcoming hotels in the pipeline, with a combined total of 461 keys, slated for development in Kolkata and Navi Mumbai. The recent acquisition of Asiya Capital and the ACIC SPVs further expanded the company’s reach, adding an extra 962 keys across six operating hotels and securing land for a new hotel in Navi Mumbai, Maharashtra.
Samhi Hotels Ltd Financials
Here are the financial highlights of the company:
| Financial Year ending / Period ending (Amt in Crores) | |||
| Particulars | FY21 | FY22 | FY23 |
|---|---|---|---|
| Assets | 2,488.00 | 2,386.58 | 2,263.00 |
| Revenue | 179.25 | 333.10 | 761.42 |
| Profit After Tax | -477.73 | -443.25 | -338.59 |
| Net Worth | -259.28 | -702.63 | -871.43 |
| Reserves and Surplus | -203.12 | -646.47 | -816.18 |
| Total Borrowing | 2,424.40 | 2,597.69 | 2,787.54 |
Objects of the Issue
- The IPO has both OFS and Fresh issue.
- The Samhi Hotels IPO includes Offer for Sale (OFS) where the proceeds will go to selling shareholders and a fresh issue. The net proceeds from the fresh issue will be allocated for the following objectives:
- Funding Working Capital Requirements: Ensuring the company maintains ample liquidity for day-to-day operations.
- General Corporate Purposes: Meeting various business needs and exploring avenues for growth.
IPO Valuation of Samhi Hotels
The IPO price range for Samhi Hotels is set at Rs 119 to 126 per share. We cannot ascertain the P/E as it is earning losses in the last 3 years and cannot compared with its peers whether the issue is under priced or over priced.
Samhi Hotels IPO Grey Market Premium (GMP)
While there is no authentic source to verify on Samhi Hotels IPO GMP, as of today, there are some sources on Chittorgarh IPO website indicate GMP of Rs 10 which is very low.
Samhi Hotels IPO – Positive Factors
- Diverse Hotel Portfolio: The company caters to a wide array of hotel operators, reducing dependence on any single brand.
- Robust Revenue Growth: Samhi Hotels has consistently demonstrated revenue growth, reflecting its strong market position.
- Focus on Innovation: The company’s expansion plans and strategic acquisitions signify its forward-looking approach.
Samhi Hotels IPO – Risk Factors
- Loss making: Company has been incurring losses making in the last 3 years. Investors should always invest in profit making company that can provide potential for share price appreciation.
- Raw Material Procurement: Lack of long-term agreements with suppliers for raw materials could impact hotel operations.
- Hospitality Industry Sensitivity: The company is sensitive to economic fluctuations that affect the hospitality sector, which could influence profitability.
- Regional Market Dependency: A significant portion of domestic business is concentrated in specific regions, posing risks if adverse developments occur.
- Debt Levels: High debt levels may limit the company’s ability to invest in growth initiatives.
- Competition: The hospitality industry has low barriers to entry, and competition from new entrants could affect market share.
Samhi Hotels IPO Review – Should you Apply or not?
The Samhi Hotels IPO offers both opportunities and challenges. Consider these key points before making an investment decision.
Pros:
- Diverse hotel portfolio.
- Consistent revenue growth.
- Strategic expansion efforts.
Cons
- Loss making company.
- Cannot ascertain whether the issue price is under priced or over priced.
- Raw material procurement risk.
- Sensitivity to hospitality industry fluctuations.
- Regional market concentration.
- High working capital requirements.
- Competitive industry landscape.
Investors may skip such IPOs for now.
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Hello Sir,
As soon as IPO open for subscription, 1st I’ll come to myinvestmentideas and read your analysis. Based your comments and analysis I either apply or skip IPOs.
Thanks for your great support to people like us.
Thank you Vikas.