The Grand Continent Hotels Limited IPO is making waves in the Indian stock market as it opens its subscription period on March 20, 2025. This IPO is a book-built issue amounting to ₹74.45 Crores, with a Fresh Issue of ₹70.74 Crores and an Offer for Sale (OFS) of ₹3.71 Crores. The IPO targets retail investors with a lot size of 1,200 shares and a price band ranging from ₹107 to ₹113 per equity share. This IPO is anticipated to have a market capitalization of ₹281.58 Crores at the upper price band of ₹113 per share.

The company's current operational portfolio includes 16 hotel properties across major Indian states, such as Karnataka, Tamil Nadu, Goa, Andhra Pradesh, and Telangana. Grand Continent Hotels is strategically positioned in the mid-scale hotel sector, offering upper-mid-priced, mid-priced, and economy hotel segments tailored for Indian middle-class guests and business travelers. As of September 30, 2024, the company operates a total of 753 hotel keys.

The Grey Market Premium (GMP) for the Grand Continent Hotels IPO is currently ₹17, reflecting an expected 19% gain upon listing. While the GMP is based on demand and supply dynamics in the unorganized market, it provides investors with an insight into potential listing gains. However, GMP is not a reliable indicator of future stock performance, as actual trading will occur post-listing on the NSE SME platform.

The IPO's subscription status as of March 21, 2025, shows a 0.40 times subscription rate, which is an early indicator of market interest. The allotment date is expected on March 25, 2025, with the tentative listing date scheduled for March 27, 2025.

Grand Continent Hotels has also raised ₹21.16 Crores from anchor investors at ₹113 per share, with 18,73,200 equity shares allocated to them. The company plans to use the net proceeds from the IPO primarily for repayment of borrowings, expansion of hotel properties, and general corporate purposes.

For investors keen on checking their allotment status, a detailed guide is available, allowing individuals to check via their application number, PAN, or DP Client ID. The process is simple, ensuring investors can quickly access the status of their application.

The financial performance of Grand Continent Hotels has shown steady growth, with revenues from operations increasing year on year. The EBITDA and Profit After Tax (PAT) figures demonstrate robust profitability. For FY24, the Pre-issue EPS stands at ₹2.54, with a post-issue EPS of ₹1.64, resulting in a P/E ratio of 69.06x, which is slightly higher than the industry average of 45x. The company's ROCE for FY24 is 18.35%, and its ROE is 25%, indicating efficient use of capital.

IPO Review and Conclusion: While the Grand Continent Hotels IPO seems to be priced at a premium, its financial performance and potential for listing gains make it an attractive option for risk-seeking investors. The steady growth in revenues and profitability reflects the strong potential of the company in the growing Indian hospitality sector. However, with a high P/E ratio, the IPO may carry some risk for investors looking for more stable returns. Risky investors may still consider applying for the IPO for the opportunity to benefit from listing gains upon listing on the stock exchange.

The Upcoming IPOs in this week and coming weeks are Arisinfra Solutions Limited, Desco Infratech Limited, ATC Energies System Limited, Shri Ahimsa Naturals Limited.

The Current active IPO are Rapid Fleet Management Services, Active Infrastructures Limited,Grand Continental Hotels.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.