Grand Continent Hotels Limited operates within the mid-scale hotel sector, targeting the upper-mid, mid-priced, and economy segments. They cater to middle-class guests and business travelers, delivering comfortable and value-for-money service offerings. As of September 30, 2024, the company owns 16 operational hotel properties with a total of 753 hotel keys, across states like Karnataka (Bengaluru/Mysuru), Tamil Nadu (Hosur), Goa (Anjuna/Morjim), Andhra Pradesh (Tirupati), and Telangana (Secunderabad).

The company is raising ₹ 74.45 Crores through a Book Built Issue. This consists of a Fresh Issue of 62.60 Lakh shares, totaling ₹ 70.74 Crores, and an Offer for Sale (OFS) of 3.28 Lakh shares, amounting to ₹ 3.71 Crores. The subscription period opens on March 20, 2025 and closes on March 24, 2025. The allotment date is expected to be March 25, 2025, and the shares will be listed on the NSE SME with a tentative listing date of March 27, 2025.

The IPO price range is set between ₹ 107 and ₹ 113 per equity share. At the upper price band of ₹ 113, the market capitalization of Grand Continent Hotels will be ₹ 281.58 Crores. The lot size for the IPO is 1,200 shares, and the minimum investment for retail investors is ₹ 1,35,600. For High-Net-Worth Individuals (HNIs), the minimum investment is ₹ 2,71,200 (for 2 lots).

IPO Details

• IPO Price Range: ₹ 107 to ₹ 113 per share
• Market Capitalization: ₹ 281.58 Crores (at the upper price band)
• Lot Size: 1,200 shares
• Minimum Investment for Retail Investors: ₹ 1,35,600
• Minimum Investment for HNIs: ₹ 2,71,200

Financial Overview

Grand Continent Hotels has shown solid financial performance over the years, with revenues from operations in FY 2024 amounting to ₹ 3,186.32 Lakhs, up from ₹ 3,153.16 Lakhs in FY 2023. The EBITDA for the same period was ₹ 1,126.94 Lakhs, reflecting a strong increase from ₹ 1,015.95 Lakhs in FY 2023. The Profit After Tax (PAT) for FY 2024 was ₹ 622.37 Lakhs, a significant jump from ₹ 407.77 Lakhs in FY 2023.

The pre-issue EPS is ₹ 2.54, while the post-issue EPS stands at ₹ 1.64 for FY24. The P/E ratio at the upper price band is 44.49x, and the post-issue P/E ratio is 69.06x, compared to the industry P/E ratio of 45x. These metrics suggest that the IPO is priced reasonably in line with the industry but at a premium relative to its current financials. The ROCE for FY 2024 stands at 18.35%, and ROE is 25.00%, signaling healthy profitability.

Grey Market Premium (GMP)

As of the latest update, the Grey Market Premium (GMP) for the Grand Continent Hotels IPO is ₹ 17, or a 19.00% premium, suggesting some positive demand for the stock in the grey market. However, the GMP is speculative, and actual listing prices will only be determined upon listing on the stock exchange.

IPO Allotment Process

The allotment date for Grand Continent Hotels is set for March 25, 2025, and the status will be available on the Registrar’s website. To check the allotment status, follow these steps:

1. Go to the IPO allotment status page.
2. Select Grand Continent Hotels IPO from the dropdown list.
3. Enter your application number, PAN, or DP Client ID.
4. Submit to view the allotment status.

Objectives of the IPO

Grand Continent Hotels aims to utilize the net proceeds from the IPO for the following purposes:

1. ₹ 34.08 Crores for the repayment or prepayment of certain borrowings.
2. ₹ 16.79 Crores for the expansion of hotel properties in India.
3. General corporate purposes.

Conclusion

The Grand Continent Hotels IPO offers a promising opportunity for investors, especially those interested in the hospitality sector. With a 19.00% GMP, the IPO shows strong investor interest. However, the P/E ratio indicates that the IPO is priced at a premium compared to its historical financials. Risk-tolerant investors seeking potential listing gains may consider applying, but long-term investors should evaluate the company’s growth trajectory and market expansion plans before making an investment decision.

The Upcoming IPOs in this week and coming weeks are Arisinfra Solutions Limited, Grand Continental Hotels, Rapid Fleet Management Services, Active Infrastructures Limited, Desco Infratech Limited.

The Current active IPO are Paradeep Parivahan, Divine Hira Jewellers.

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