Ventive Hospitality, a prominent player in the mixed-use development sector, made a stellar debut in the stock market, with its shares listing at ₹718.15 on the BSE. This marks a premium of 11.7% over the IPO price of ₹643. The stock’s performance shows strong market interest, fueled by the company's unique positioning at the intersection of luxury hospitality and efficient workspaces.

About Ventive Hospitality and its IPO

Ventive Hospitality is known for its integrated development approach, blending high-end luxury hospitality with state-of-the-art workspaces. The company creates exclusive communities where office spaces seamlessly complement leisure and recreation. Their projects are strategically designed to support dynamic work cultures while offering unparalleled amenities.

The company launched its book-built issue to raise ₹1,600 crore, offering 248.83 lakh shares. The IPO subscription period ran from December 20 to December 24, 2024, with a price band set between ₹610 and ₹643 per equity share. On the final day of the subscription period, the IPO was subscribed 9.82 times, indicating robust demand for the stock.

Ventive Hospitality IPO Details

The Ventive Hospitality IPO raised significant attention, with investors attracted by the company's vision and strong promoter backing. The issue size of ₹1,600 crore was entirely a fresh issue of shares, with no offer for sale. The IPO’s grey market premium remained at ₹0, reflecting a lack of speculative trading activity. Despite this, the listing marked a positive surprise, with the stock surging to ₹718.15 on debut.

With a market capitalization of ₹15,016.74 crore at the IPO price, the company’s strong debut reflects investor confidence. Notably, the subscription lot size was 23 shares, with retail investors required to invest a minimum of ₹14,789, while High Net-Worth Individuals (HNIs) had to invest ₹2,07,046 for 14 lots.

Company Financials and Market Metrics

Ventive Hospitality posted revenues of ₹19,073.78 million for FY24, a significant rise from ₹17,621.87 million in FY23. However, the company has struggled with profitability, showing a negative profit after tax (PAT) of ₹667.46 million in FY24, after having earned a modest profit of ₹156.75 million in FY23. The company’s EBITDA for FY24 stood at ₹7,994.47 million, up from ₹7,679.53 million in FY23, showing efficiency in operations despite the negative PAT.

The Pre-issue EPS was negative at ₹-5.24, while the Post-issue EPS is ₹-2.86, indicating that the company is still in the recovery phase. P/E ratios for the IPO stood at -122.71x pre-issue and -224.98x post-issue, compared to an industry average of 78x. This suggests that the IPO was priced aggressively despite the negative earnings.

IPO Subscription and Allotment Details

The Ventive Hospitality IPO attracted significant interest from anchor investors, raising ₹719.54 crore. The shares were allotted to anchor investors at the upper price band of ₹643, indicating confidence from institutional investors. The allotment date for the IPO was December 26, 2024, and investors can check their allotment status on the registrar’s website.

The IPO objectives include the repayment of borrowings, including interest accrued, and general corporate purposes. Despite the financial performance, the strategic direction of the company’s projects holds promise for the long-term growth of the business, with a focus on creating luxury mixed-use spaces that cater to both work and leisure needs.

Should You Invest in Ventive Hospitality?

Investors who are looking for short-term gains might want to reconsider, as the grey market premium and financial metrics point to potential volatility. Despite a strong listing debut, the negative P/E ratios and EPS suggest that Ventive Hospitality might not be the best choice for immediate listing gains. For investors looking for long-term growth, the company’s vision for creating high-end communities and leveraging work-and-leisure spaces could prove beneficial.

Takeaway

In conclusion, Ventive Hospitality has made a successful debut on the stock exchanges, but the financial outlook suggests that it may not deliver substantial listing gains. Long-term investors should consider the company’s growth potential in the luxury hospitality and workspace sectors before making a decision.

The Upcoming IPOs in this week and coming weeks are Indo Farm, Technichem Organics, Leo Dry Fruits, Davin Sons, Fabtech Technologies and Standard Glass Lining.

The Current active IPO is Citichem India and Anya Polytech.

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