Saj Hotels Limited, a player in the hospitality industry, has launched its Initial Public Offering (IPO) to raise ₹27.62 crores. The IPO is a Fixed Price Issue, consisting entirely of a fresh issue of 42.5 lakh shares. The company offers a broad portfolio of Business-to-Business (B2B), Business-to-Business-to-Customer (B2B2C), and Business-to-Customer (B2C) services, ranging from traditional resort accommodations to villa rentals and restaurant and bar properties.

The IPO subscription period began on September 27, 2024, and will close on October 1, 2024. Investors can subscribe to the shares at a fixed price of ₹65 per equity share. The minimum lot size for retail investors is 2,000 shares, meaning a minimum investment of ₹1,30,000. For High-Net-Worth Individuals (HNIs), the minimum investment is two lots (4,000 shares), amounting to ₹2,60,000.

CORPWIS ADVISORS PRIVATE LIMITED is the book-running lead manager for this IPO, and SATELLITE CORPORATE SERVICES PRIVATE LIMITED is the registrar. NNM Securities Private Limited serves as the sole market maker.

The share allotment for the Saj Hotels IPO is expected to be finalized on October 3, 2024, with the shares likely to be listed on the NSE SME on October 7, 2024.

To check the IPO allotment status, investors can follow these steps:

Navigate to the allotment status page on the registrar’s website.

Select Saj Hotels Limited IPO from the dropdown list of IPOs.

Enter details such as application number, PAN, or DP Client ID.

Submit to view the allotment status.

Financial Overview and IPO Review

Saj Hotels has established itself as a key player in the hospitality sector, offering a diverse range of services that cater to both corporate clients and individual consumers. With a focus on providing luxury accommodation, villa rentals, and restaurant and bar services, Saj Hotels has built a strong reputation for delivering quality B2B, B2B2C, and B2C hospitality solutions.

The company is led by Rahul Maganlal Timbadia, Kartik Maganlal Timbadia, and Karna Kartik Timbadia, who bring significant experience and vision to the business.

Financially, Saj Hotels has seen steady growth over the past few years. In Fiscal Year 2024, the company generated ₹1,455.49 lakhs in revenue, compared to ₹1,282.19 lakhs in FY2023, ₹1,287.90 lakhs in FY2022, and ₹812.14 lakhs in FY2021. This upward trend reflects the company’s ability to capture new market opportunities while enhancing its service offerings.

The company’s EBITDA has also shown impressive growth, rising from ₹178.97 lakhs in FY2021 to ₹652.57 lakhs in FY2024. Similarly, the Profit After Tax (PAT) has improved significantly, with a PAT of ₹345.40 lakhs in FY2024, up from ₹347.99 lakhs in FY2023, ₹132.02 lakhs in FY2022, and a loss of ₹-120.18 lakhs in FY2021.

Saj Hotels’ pre-issue EPS stands at ₹2.90, while the post-issue EPS is expected to be ₹2.14. The pre-issue P/E ratio is 22.41x, and the post-issue P/E ratio is 30.37x, which is higher than the industry average P/E of 27.25x. The company’s ROCE for FY24 is 26.36%, while its RoAE is 19.91%.

Despite the company's steady financial growth, the Grey Market Premium (GMP) for Saj Hotels Limited IPO is currently ₹0, reflecting market caution. GMP should not be the sole factor in an investor’s decision-making, as it can fluctuate based on market demand and supply conditions.

IPO Objectives and Use of Proceeds

The funds raised through the Saj Hotels IPO will be utilized to meet the following objectives:

₹1,700 lakhs for capital expenditure towards expanding existing resort properties.

₹400 lakhs to fund the company’s working capital requirements.

₹332.50 lakhs for general corporate expenses.

While the company has demonstrated strong growth potential, the fully priced nature of the IPO, along with the lack of Grey Market Premium, suggests that the IPO may not offer significant listing gains. As such, we recommend that investors avoid this IPO for both short-term listing gains and long-term investment purposes.

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