SAMHI Hotels Limited IPO

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14th – 18th Sep 2023
27 Sep 2023
₹119 – ₹126
119 shares (₹14994)

About


Incorporated in 2010, SAMHI Hotel Limited is a prominent branded hotel ownership and asset management platform in India, with the third largest inventory of operational keys (owned and leased) in India as of March 31, 2023.

Within 12 years of starting our business operations, Company built a portfolio of 3,839 keys across 25 operating hotels in 12 of India’s key urban consumption centers, including Bengaluru (Karnataka), Hyderabad (Telangana), National Capital Region (“NCR”), Pune (Maharashtra), Chennai (Tamil Nadu) and Ahmedabad (Gujarat), as of March 31, 2023. After the acquisition of ACIC on August 10, 2023, our portfolio has further increased to 4,801 keys across 31 operating hotels.

The company has adopted an acquisition-led strategy, where they acquire and successfully turn around hotels to grow their business by taking steps to further upgrade properties and engage with established branded hotel operators to allow the hotels to be appropriately positioned within the market. Subsequent to this one-time upgrade of the property, they deploy their in-house and proprietary asset management tools and capabilities to further enhance the ongoing financial and operational performance of the property.

The inventory will be supplemented by 962 keys from the ACIC Portfolio under SAMHI Hotels’ share purchase agreement with Asiya Capital and its affiliates (the “ACIC Portfolio”), making SAMHI Hotels the largest single owner of Marriott hotels in India with over 43% share of the Fairfield by the Marriott brand and over 30% share of the Four Points by the Sheraton brand, as of March 31, 2023.

About the industry:

Travel and Tourism in India

The Indian travel and tourism sector’s contribution to the GDP in 2021 was valued at US$178 billion, which accounted for 5.8% of the GDP. The total contribution was up by over 43% in comparison to the previous year and is almost 85% of the sector’s contribution to the GDP during 2019. Of this, almost 95% of the total travel and tourism spend can be attributed to domestic demand which was up by over 50% in comparison to the previous year and the remaining 5% can be attributed to the international market. Travel and tourism are the third largest foreign exchange earners for India, and the Indian tourism industry is anticipated to grow at an annual rate of 10.35% between 2019 and 2028, reaching a total value of US$512 billion by 2028.

As per the World Travel and Tourism Council’s (WTTC) Global Economic Impact Trends 2020 report, India ranked 10th in comparison to global markets in terms of travel and tourism GDP contribution with US$194 billion, reflecting a 5% increase in comparison to the previous year. India also ranked 1st among all the countries in the world for the highest number of jobs created in the travel and tourism industry between 2014 and 2019 with a total of 6.36 million jobs.

In terms of domestic spend value, India occupied the 4th place with US$151.11 billion in comparison to the top 20 global markets for 2021, as against US$155.8 billion for 2019 occupying the 6th place for the same markets. Leisure and business travel spending in India is projected to increase by twofold by 2028 in comparison to 2019. Business travel spending for 2019 was recorded at US$12.84 billion and is projected to reach US$24.2 billion by 2028.

While domestic tourism was the first to recover since the third quarter of calendar year 2022 and continues to perform well, foreign tourist arrivals show significant recovery in comparison to the last two years and are moving closer to 2019 figures.

Hotel industry landscape in India

As of March 2023, India has over 360,000 keys including branded hotels, independently run hotels, and aggregators. Of this, the current branded inventory market size as of March 2023 stands at approximately 180,000.

Across India, the top 10 hotel brands by operating inventory size manage over 130,000 keys which account for approximately 76% of the total branded inventory in India, as of March 31, 2023. Of this, Marriott International operates the largest volume of branded inventory in the country with over 28,600 keys, accounting for approximately 22% of the total branded inventory followed by IHCL with over 21,800 keys accounting for almost 16% of the total branded inventory, as of March 31, 2023.

The top 12 hotel-owning entities in India by inventory size own over 18,000 keys which account for approximately 10% of the total branded inventory in India, as of March 31, 2023. The top four companies with 22,799 keys are “owner-operators” i.e., they only own hotels that are branded by their brand (and in addition manage hotels for other owners on management contract/ franchise).

Objects of the issue and proceeds utilization:

The Rs. 1370.10 crores public offer of SAMHI Hotels Limited comprises a fresh equity issue worth 1200 crores and OFS worth 170.10 crores.

Purpose Proceeds (₹ crores)
Repayment or prepayment, in full or in part, of borrowings availed by the Company 900
General corporate purposes Balance

Financial information and other valuation metrics

Financial Year Total Assets (₹ crores) Total Revenue (₹ crores) Profit After Tax (₹ crores) EPS EBITDA (₹ crores)
March 31, 2021 2488.0 179.25 (477.73) (62.64) (59.7)
March 31, 2022 2386.5 333.1 (443.25) (58.12) 21.8
March 31, 2023 2263 761.4 (338.59) (43.93) 260.5

Risk factors to consider:

Losses and negative net worth in the past: The company has experienced restated losses and negative net worth in recent years. It had losses of 338.5 crores in FY 2023 and had a negative net worth of 871.4 crores at the end of FY23.

Concentration of revenue: Nearly 37% of its revenues are derived from its top 3 largest hotels and from hotels concentrated in a few geographical regions and any adverse developments affecting such hotels or regions could have an adverse effect on their business, results of operation, and financial condition.

IPO Schedule

Issue Period 14th September to 18th September 2023
Deadline for accepting UPI mandate Until 5 PM on the issue closing day
Finalization of Allotment 22nd September 2023
Initiation of Refunds 25th September 2023
Credit of Shares 26th September 2023
Date of Listing 27th September 2023
Mandate end date 3rd October 2023
Anchor Investors Lock-In End Date 18th October 2023

How to apply to the SAMHI Hotels Limited IPO?

You can apply for the SAMHI Hotels Limited IPO using any supported UPI app by following two steps:

  • Enter your bid on Kite
  • Accept the UPI mandate on your phone

On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.

How to check the allotment status for SAMHI Hotels Limited IPO?

You can check the allotment status for the SAMHI Hotels Limited IPO on the website of the Registrar and Transfer agent. Alternatively, you can also check the allotment status on the NSE website.