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Ventive Hospitality IPO Subscribed 9.82x, GMP; Check Allotment & Listing Dates
Team Finance Saathi
28/Dec/2024
What's covered under the Article:
- Ventive Hospitality’s ₹1,600 Crores IPO opens with a price band of ₹610-₹643 per share, aiming for a ₹15,016.74 Crore market cap.
- The IPO has witnessed impressive investor demand, with a subscription of 9.82x on its final day.
- The company plans to use IPO proceeds for debt repayment and general corporate purposes, including payments for step-down subsidiaries.
The Ventive Hospitality IPO, which opened for subscription on December 20, 2024, presents an interesting opportunity for investors in India's booming real estate and hospitality sector. As a mixed-use developer, Ventive Hospitality blends luxury hospitality with high-efficiency workspaces, creating exclusive communities with premium amenities. This IPO, valued at ₹1,600 Crores, is primarily a fresh issue, with the company offering 248.83 lakh shares at a price band of ₹610 to ₹643 per share.
For retail investors, the minimum investment is ₹14,789 for a lot size of 23 shares, while High-Net-Worth Individuals (HNIs) are required to invest in 14 lots, amounting to ₹2,07,046. The IPO subscription period ends on December 24, 2024, with an expected listing date on December 30, 2024. The market capitalization of the company at the upper price band of ₹643 per share stands at ₹15,016.74 Crores, making it one of the prominent upcoming IPOs in the Indian market.
IPO Details and Subscription Trends
As of December 24, 2024, the Ventive Hospitality IPO had been oversubscribed by 9.82 times on its final day of subscription. This high demand reflects investor interest in the real estate sector, particularly in mixed-use developments combining office spaces and luxury hospitality. Despite this positive subscription, the grey market premium (GMP) remains at ₹0, which suggests that investors should be cautious about expecting substantial listing gains.
The Anchor Investors have shown confidence in the company, with a total of ₹719.54 Crores raised at the upper price band of ₹643 per share. This indicates strong institutional support for the IPO, even though the company's financials show negative profit growth for FY24.
Financial Performance and Metrics
Ventive Hospitality's revenues for the fiscal year 2024 stood at ₹19,073.78 Million, reflecting a strong growth trajectory from the previous year. However, the company reported a net loss of ₹667.46 Million for FY24, which is a concern for potential investors. This negative performance, combined with a pre-issue P/E ratio of -122.71x, suggests that the IPO is fully priced, and investors should approach with caution.
The company's Key Performance Indicators (KPIs) are mixed, with a Return on Capital Employed (ROCE) of 0.31% and a Return on Equity (ROE) of 0.66%. These low ratios, coupled with negative EPS, highlight the challenges Ventive faces in achieving profitable growth. The Annualized EPS is -15.94, and the P/E ratio stands at -40.33x, both of which raise questions about the company's valuation and future profitability.
Investment Recommendation
Considering the negative financial indicators, Ventive Hospitality IPO may not be the best option for investors looking for quick listing gains. However, for long-term investors with a strategic interest in the luxury real estate and mixed-use development sectors, this IPO presents an opportunity to invest in a company with strong growth potential.
Given the strong institutional backing and the increasing demand for premium workspaces and luxury hospitality services in India, Ventive may find its footing in the long term, though investors should be aware of the financial risks involved in the short term. Therefore, careful consideration is advised before proceeding with investments in the IPO.