Real estate developer K Raheja Corp’s hospitality company Chalet Hotels on Friday said that it will launch its Rs1,641 crore initial public offering on 29 January.The public offering will close on 31 January.
Chalet Hotels’ IPO is the first major IPO to hit the Indian markets in almost four months.
The company, which operates hotel properties in major Indian metro cities such as Mumbai, Bengaluru and Hyderabad, has priced its shares in the range of ₹275-280 per share. At the lower end of price band, the IPO will be worth ₹16,29 crore, while at the upper end it will be worth ₹1,641 crore.
The company plans to raise ₹950 crore of primary capital that the company plans to use pare down its debt. The promoters of the company will dilute their shareholding, and are selling 24.6 million shares, which at the upper end of the price band will fetch them ₹691.1 crore.
“The company has a net debt of ₹2,499 crore and it will use ₹720 crore from the primary capital to repay debt, bring it down to ₹1,549.8 crore. This will reduce the debt to equity ratio to just over 1.1 times,” said Rajeev Newar, executive director and chief financial officer at Chalet Hotels Ltd.
For the financial year 2017-18, Chalet reported a revenue of ₹929.5 crore with revenues growing at a compounded annual rate of 15.81% between the financial years 2014 and 2018. Chalet’s portfolio currently includes an inventory of 2,328 keys comprising of brands such as JW Marriott, Westin, Marriott, Marriott
Executive Apartments, Renaissance and Four Points by Sheraton.
According to Sanjay Sethi, managing director and chief executive at Chalet, going ahead the company plans to grow its business through both organic and inorganic growth.
“We believe that we have a long upcycle that the hospitality industry is going to see in the coming years and thus we would like to have more inventory in our portfolio to take advantage of that.,” said Sethi.
The company has three new properties coming up, two in Mumbai and one in Hyderabad, all of which should become operational in the year 2021, he added.
Chalet is also looking at new markets such as Pune, Chennai, as well as Goa, said Sethi.
In 2018, 24 companies raised ₹ 30,959 crore through their initial public offerings (IPOs), while 2017 witnessed 36 companies raising ₹ 67,147 crore through public floats, data from primary market tracker Prime Database shows.
This article was first published on livemint.com