Blog

Samhi Hotels IPO entails to raise ₹1,370.10 Crores, which includes a fresh issue worth ₹1200 Crores and an offer for sale worth ₹170.10 Crore. Samhi Hotels is a leading hotel ownership and asset management platform with 25 operating hotels located in 12 of India’s main urban consumption centres.

About Samhi Hotels Limited:

• Samhi Hotels, incorporated on December 28, 2010, is a leading hotel ownership and asset management platform in India.
• As of March 31, 2023, it had the third largest inventory of operational keys (owned and leased) in the country.
• It has a portfolio of 3,839 keys spanning 25 operating hotels located in 12 major cities.
• The OFS comprises up to 84,28,510 shares by Blue Chandra Pte Ltd, up to 49,31,490 shares by Goldman Sachs Investments Holdings (Asia) Limited, and up to 1,40,000 shares by GTI Capital Alpha Pvt Ltd.
• The recent acquisition of Asiya Capital and ACIC SPV has given SAMHI Hotels Ltd access to an additional 962 keys (same as hotel room) across 6 operating hotels. It has its keys under well recognized hotels operators like Courtyard Marriott, Sheraton, Hyatt, and Holiday Inn, among others.

Samhi Hotels IPO: Financials

Anchor Investors: Partial list

Samhi Hotels IPO: Salient Points

• The company has shown improvement in occupancy improved to 73.9% and avergage room rental to Rs 5854, resin Q4FY2023 as against 50.3% and Rs 3692 in Q4FY2022.
• There is improvement in its operational performance but company is still in losses and may continue to be so for some more period.
• Losses came down from ₹ -443.25 Crores in FY22 to ₹ -338.95 Crores in FY23,
• As of June 30, 2023, it had outstanding borrowings o f ₹28,12 crore on a consolidated basis
• Out of the proceeds from the fresh issue, Rs 900 crore will be used for repayment, prepayment and redemption, in full or in part, of certain borrowings.
• There are good sector tailwinds, with hotels in 12 major Indian cities and many in the central business districts.
• Company has demonstrated it ability to buy struggling hotels and improve them through renovations or changing their brand and turning them around.
• It has entered into hotel management agreement with reputed chains like Marriott under the banner of ‘Courtyard by Marriott‘, ‘Fairfield by Marriott‘, ‘Four Points by Marriott‘, ‘Sheraton by Marriott‘ and ‘Renaissance by Marriott‘, with Hyatt under the banner ‘Hyatt Place‘ and ‘Hyatt Regency‘ and IHG under the banner of ‘Holiday Inn Express‘.
• The 4,801 keys (slang for hotel room) held by SAMHI Hotels Ltd are spread across several premium properties across major destinations.
• These include 170 keys at the Courtyard by Marriott in Bengaluru, 270 keys at Fairfield by Marriott, Bengaluru across Whitefield and ORR properties, 153 keys in Fairfield by Marriott, Chennai, 148 keys at Fairfield by Marriott in Rajajinagar Bengaluru, 123 keys at Four Points by Sheraton, Vizag, 130 keys at Fairfield by Marriott, Goa, 109 keys at Fairfield by Marriott, Pune, 126 keys at Fairfield by Marriott, Coimbatore, 130 keys at Holiday Inn Express, Ahmedabad, 170 keys at Holiday Inn Express, Hyderabad and 161 keys by Holiday Inn Express, Bengaluru.
• Further SAMHI Hotels Ltd also has good no. of keys across Holiday Inn properties in Chennai, Gurugram, Nashik and Pune.
• On a EV/EBIDTA basis he offer is made at around 20x while its peers like Chalet Hotels, Lemon tree are valued at slightly higher number. But they are in profit while Samhi Hotels is still in red.
• The company is owned by bunch of PE investors who may make exit from time to time. Recently after filing its RHP , a PE investors sold its stake before the IPO.
• Samhi Hotels IPO could prove to be good in long term but Iam not sure of listing gains and considering the big rush of IPOs in next few weeks, Iam likely to skip it and may enter it if it lists at a discount. However given sector tailwinds it can surprise on listing.
• GMP as reported on social media is around Rs. 20/-
• Recent market melt down is not good for listing gains in the IPO as they have been priced in different market conditions.
• Please do your own diligence. There is good amount of risk in all equity investments.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.