Saj Hotels Limited is an emerging player in the hospitality industry, offering a diverse portfolio that spans various hospitality services. Their offerings include Business-to-Business (B2B), Business-to-Business-to-Customer (B2B2C), and Business-to-Customer (B2C) models, catering to a wide range of customers. From traditional resort accommodations to villa rentals and restaurant and bar properties, Saj Hotels aims to provide a comprehensive hospitality experience.

The Saj Hotels IPO is a Fixed Price Issue amounting to ₹27.62 crores, which consists entirely of a Fresh Issue of 42.50 lakh shares. The subscription period for this IPO commenced on September 27, 2024, and will close on October 01, 2024. The allotment of shares is expected to be finalized on or about October 03, 2024, with a tentative listing date on the NSE SME platform scheduled for October 07, 2024.

The share price for the Saj Hotels IPO is set at ₹65 per equity share, with a minimum lot size of 2,000 shares. This translates to a minimum investment requirement of ₹1,30,000 for retail investors, while High-Net-Worth Individuals (HNIs) must invest in a minimum of 2 lots (4,000 shares), amounting to ₹2,60,000. This pricing structure is tailored to attract institutional investors and retail participants alike.

The IPO is managed by CORPWIS ADVISORS PRIVATE LIMITED as the book-running lead manager, with SATELLITE CORPORATE SERVICES PRIVATE LIMITED serving as the registrar for the issue. NNM Securities Private Limited has been appointed as the sole market maker for Saj Hotels.

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for the Saj Hotels IPO is currently expected to be around ₹0, indicating a lack of speculative trading activity. The GMP primarily reflects demand and supply dynamics in the unorganized market, and investors should approach this metric with caution. It is crucial to focus on the company’s fundamentals rather than relying solely on the GMP for investment decisions.

Live Subscription Status

As of 11:38 AM on October 01, 2024, the Saj Hotels IPO has been subscribed 1.97 times on its third day of the subscription period, demonstrating moderate interest from investors. For real-time updates on the IPO’s subscription status, interested parties can visit the official NSE website for detailed insights.

Allotment Process

The Saj Hotels IPO allotment is scheduled to be finalized on October 03, 2024. Investors can check their allotment status online by following these simple steps:

Navigate to the IPO allotment status page.

Select Saj Hotels Limited IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to view your allotment status.

This user-friendly process allows investors to verify their allotment efficiently.

Objectives of the IPO

The proceeds from the Saj Hotels IPO will be allocated towards the following objectives:

₹1,700.00 lakhs for capital expenditure requirements aimed at expanding existing resort properties.

₹400.00 lakhs to fund the working capital requirements of the company.

₹332.50 lakhs for general corporate expenses, which may include operational costs and administrative expenses.

These funds are essential for enhancing the company's capabilities, enabling Saj Hotels to expand its offerings and improve service quality.

Financial Performance

Saj Hotels has demonstrated steady financial growth over the past several fiscal years. In FY2024, the company reported revenue of ₹1,455.49 lakhs, an increase from ₹1,282.19 lakhs in FY2023, ₹1,287.90 lakhs in FY2022, and ₹812.14 lakhs in FY2021. The EBITDA figures also show a positive trend, moving from ₹178.97 lakhs in FY2021 to ₹652.57 lakhs in FY2024. Additionally, the Profit After Tax (PAT) has increased significantly, from a loss of ₹120.18 lakhs in FY2021 to ₹345.40 lakhs in FY2024, underscoring the company's improving profitability.

For the Saj Hotels IPO, the company is issuing shares at a pre-issue EPS of ₹2.90 and a post-issue EPS of ₹2.14. The pre-issue P/E ratio stands at 22.41x, while the post-issue P/E ratio is 30.37x, which is above the industry average P/E ratio of 27.25x. Furthermore, the company boasts a Return on Capital Employed (ROCE) of 26.36% and a Return on Equity (RoE) of 19.91% for FY2024. These metrics suggest that the IPO is fully priced, indicating a potentially higher valuation risk.

Investment Recommendation

Despite the consistent growth in financial performance, the GMP indicating potential listing gains of 0% suggests that short-term investors may want to exercise caution. Given the company's financial metrics and valuation, we recommend that investors avoid the Saj Hotels IPO for immediate listing gains or long-term investment at this stage.

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In conclusion, while the Saj Hotels IPO presents opportunities in a competitive hospitality market, investors should evaluate their strategies based on current market conditions and the company's valuation metrics before making any decisions.