Among hotel chains with asset ownership, apeejay surrendra Park Hotels Limited ranks as the eighth largest in India in terms of chain affiliated hotel rooms inventory as of September 30, 2023. The 45,800 rooms owned by chained affiliated hotels across the country as at September 30, 2023, the Company comprises of about 1,300 rooms constituting 2.80% of the total inventory. They operate hospitality assets under the own brands, “THE PARK”, “THE PARK Collection”, “Zone by The Park”, “Zone Connect by The Park” and “Stop by Zone”. They have a long-standing expertise of over 55 years in the hospitality business of owning and operating hotels, with the first hotel being launched under the brand “THE PARK” at the iconic Park Street in Kolkata. They have established presence in the retail food and beverage industry through the retail brand ‘Flurys’. They have pioneered the concept of luxury boutique hotels in India under the brand, “THE PARK”, extending it further through and “THE PARK Collection”, and in upper-midscale categories with the brands “Zone by The Park” and “Zone Connect by The Park”. As of September 30, 2023, they operate 81 restaurants, night clubs and bars, offering a wide selection of culinary experiences. The night club and entertainment division contribute to the brand positioning and allows cross-selling opportunities. They have created award-winning brands such as Zen, Someplace Else, Tantra, Roxy, iBar, The Leather Bar, Pasha and Aqua. Sale of food, and beverage, together with sale of wine, and liquor contributed Rs 1,146.73 million, Rs 1,039.94 million, Rs 2,280.26 million, Rs 1,126.50 million, and Rs 797.90 million, comprising 42.11%, 43.61%, 43.48%, 42.06% and 41.93% of the total income, for the six months ended September 30, 2023 and September 30, 2022 and for the years ended March 31, 2023, 2022 and 2021, respectively. This reflects the strength of the food, beverage, and entertainment offerings. Non-cyclical earnings from food and beverage business diversify risk associated to seasonal and cyclicality hospitality industry while complementing the hotel business by driving their occupancy levels, ARR, RevPAR and provide resilience to overall revenues of the Company. Food and beverage contribution to total revenue at Company’s hotels for Fiscal 2021, Fiscal 2022, and Fiscal 2023 is higher than average food and beverage contribution to revenues of select listed companies. THE PARK hotels recorded (a) RevPAR of Rs 5,652.58, and Rs 5,571.00, (b) occupancy rate of 93.29% and 91.77% and (c) average room per revenue of Rs 6,059.05 and Rs 6.070.51 for the six months ended September 30, 2023 and year ended March 31, 2023, respectively. High occupancy levels at The PARK hotels enable strong RevPAR. The occupancy and RevPAR indices (hotel performance for occupancy and RevPAR over the market occupancy and RevPAR) reflect that the parameters are ahead of the market in 37 of the 40 data points. As per financial performance, BLS E-Services Limited has posted total income / net profits of Rs 190.29 Cr / Rs (75.88) Cr (FY21), Rs 267.83 Cr / Rs (28.20) Cr (FY22), Rs 524.43 Cr / Rs 48.06 Cr (FY23) and Rs 272.31 Cr / Rs 22.95 Cr (Q2 FY24). So as per previous financials data, company has shown exceptional growth. Company has an average EPS of Rs 0.12 and average RoNW of 0.51% for last three fiscals. Issue is priced at a P/BV of 4.68 as per NAV of 33.13 as on 30.09.23. If we attribute latest earnings of FY22, FY23, and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around (117.27), 68.81 and 72.05 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, three lead managers are associated with this IPO, and have handled around 152 IPOs in last three fiscals. JM Financial Limited : This is 47th Main Board IPO from this BRLM. From last 10 Main Board IPOs, two opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 Main Board IPOs, two are trading below issue price and remaining are trading above issue price.( As on 30.01.2024 ) Axis Capital Limited : This is 51st Main Board IPO from this BRLM. From last 10 Main Board IPOs, one opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 Main Board IPOs, one is trading below issue price and remaining are trading above issue price.( As on 30.01.2024 ) ICICI Securities Limited : This is 57th Main Board IPO from this BRLM. From last 10 Main Board IPOs, two opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 Main Board IPOs, three are trading below issue price and remaining are trading above issue price.( As on 30.01.2024 ) As per financials, Apeejay Surrendra Park Hotels Limited has shown good growth, RoNW is 9.03% and P/E is respectively (117.27), 68.81 and 72.05 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of Hotel Industry, which is highly competitive and fragmented segment. But there is good growth opportunity and performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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