The Ventive Hospitality IPO, worth ₹1,600 crore, has opened for subscription and presents an opportunity to invest in a prominent player in the luxury and upscale hospitality segment. This Pune-based company has a strong track record, operational excellence, and plans for significant expansion.
Key Highlights of Ventive Hospitality IPO
| Details | Information |
|---|---|
| IPO Dates | December 20, 2024 – December 24, 2024 |
| Price Band | ₹610 – ₹643 per share |
| Minimum Lot Size | 23 shares |
| Issue Size | ₹1,600 crore |
| Type of Issue | Entirely a fresh issue (2,48,83,358 equity shares) |
| Market Capitalization Post-IPO | ₹15,016.7 crore |
| P/E Ratio | 90x (FY24 earnings) |
| Tentative Listing Date | December 30, 2024 |
| Reserved Quota | 75% QIB, 15% NII, 10% Retail |
| Book Running Lead Managers (BRLMs) | JM Financial, Axis Capital, HSBC Securities, ICICI Securities, Kotak Mahindra, SBI Capital Markets |
| Registrar | Kfin Technologies |
Company Background
Incorporated in February 2002, Ventive Hospitality operates in the hospitality industry with a primary focus on developing and managing high-end luxury hotels and resorts. Key details include:
- Current Portfolio: 11 operational properties in India and the Maldives with a total of 2,036 keys.
- Revenue Split: 41% of revenue from annuity assets leased to marquee tenants like HSBC, Deutsche Bank, and Starbucks.
- Expansion Plans: Development pipeline includes projects in Varanasi, Bengaluru, and Sri Lanka, adding 367 keys by FY28.
Financial Performance
For the six months ended September 30, 2024, Ventive Hospitality reported:
- Revenue: ₹875.9 crore
- Net Loss: ₹137.83 crore
The company plans to utilize IPO proceeds for:
- Repayment of debt (₹1,400 crore).
- Funding general corporate purposes.
Brokerages’ Recommendations
Anand Rathi Research
- Rating: Subscribe for Long Term
- The company is well-positioned to benefit from the growing hospitality market, reduced debt burden, and strong expansion plans.
- Current P/E of 90x is fully priced but justifiable considering future growth.
Canara Bank Securities
- Rating: Neutral
- Despite strong fundamentals and operational efficiency, the asset-heavy model and profitability challenges warrant a cautious stance.
StoxBox
- Rating: Subscribe
- Competitive valuation at a P/E of 40.4x compared to peers. Expansion plans and a robust pipeline make it a promising investment for medium- to long-term gains.
SBI Securities
- Rating: Subscribe for Long Term
- The IPO is well-valued and offers potential growth opportunities in the luxury hospitality sector.
Investment Merits
- Strong Market Presence: Established luxury hospitality assets in prime locations.
- Debt Reduction Strategy: ₹1,400 crore from IPO proceeds will reduce finance costs and improve profitability.
- Expansion Pipeline: Addition of 367 keys by FY28 will boost growth.
- Attractive Valuation: P/E ratio of 40.4x makes it an appealing investment relative to peers.
Risks
- High Debt: Despite plans for repayment, current leverage impacts profitability.
- Asset-Heavy Model: Significant capital tied up in physical assets.
- Valuation Concerns: Rich valuations might deter short-term investors.
How to Apply for the Ventive Hospitality IPO
- Visit your broker’s platform or trading app.
- Go to the IPO section and search for Ventive Hospitality IPO.
- Enter the lot size and price (₹610-₹643 per share).
- Complete the application and payment process.
- Wait for allotment updates.
FAQs
What is the price band for the Ventive Hospitality IPO?
The price band is ₹610-₹643 per share.
How much is the minimum investment required?
Investors need to apply for 23 shares, amounting to approximately ₹14,030-₹14,809.
What will the IPO proceeds be used for?
The proceeds will primarily be used for debt repayment, working capital, and general corporate purposes.
When will the allotment be finalized?
The allotment is expected to be finalized by December 27, 2024.
What is the listing date for Ventive Hospitality shares?
The tentative listing date is December 30, 2024.
Is Ventive Hospitality a profitable company?
Currently, the company reported a net loss of ₹137.83 crore for H1 FY24 but has a strong revenue base and expansion potential.
Should you subscribe to the Ventive Hospitality IPO?
Brokerages generally recommend subscribing for long-term gains, considering its strong growth potential and strategic plans.
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