Apeejay Surrendra Park Hotels Ltd (ASPHL) is a hotel company that operates under two brands: The Park and Zone by The Park. The company is set to revive its fundraising activities with a decision to go public with an initial public offering (IPO) of Rs 1500 crore by September of this year. Axis Bank, JM Financial, and ICICI Securities are the lead managers for the IPO. ASPHL is expected to be valued at Rs 5000 crore, and about 30% of the company's stake will be offered in the IPO, which will be a mix of primary and secondary sale of equity.
Apeejay Surrendra Park Hotels Ltd (ASPHL) is a hotel company that operates under two brands: The Park and Zone by The Park. The company is set to revive its fundraising activities with a decision to go public with an initial public offering (IPO) of Rs 1500 crore by September of this year. Axis Bank, JM Financial, and ICICI Securities are the lead managers for the IPO. ASPHL is expected to be valued at Rs 5000 crore, and about 30% of the company's stake will be offered in the IPO, which will be a mix of primary and secondary sale of equity.
In January 2020, ASPHL had filed its draft red herring prospectus for a Rs 21,000-crore IPO and received regulatory approval. However, the COVID-19 pandemic had postponed its IPO plans first in March-April 2020 and again in April 2021. ASPHL currently has 38 hotels with 3000 rooms and plans to add another 2000 keys to take the number of hotels to 40 in the next four years. The company owns 7 properties, 13 under the management contract, and the rest under the lease model. Its hotels are located in Bangalore, Chennai, Hyderabad, Kolkata, Navi Mumbai, New Delhi, and Vishakhapatnam.
The hotel chain also owns the famous Flurys brand that it acquired in 1965. It has 65 Flurys outlets across West Bengal, Mumbai, and Delhi, and it plans to have 200 Flurys outlets across the country in the next two years, according to the chain's MD Vijay Dewan. Apeejay promoters and group companies currently own more than 75% of the hotel chains, while its private equity investor, RECP IV Park Hotel Investors, a Mauritius-based investment vehicle owned by global investment bank Credit Suisse, holds about 8% stake.
In the existing portfolio, out of the total rooms, 1264 rooms are under THE Park hotels brand, and the rest are under Zone by The Park brand. In FY2022, ASPHL launched a new brand, Zone CONNECT, with the signing of three hotels (around 153 keys) under a management contract. Further, The PARK Indore was launched in FY2022 with 99 keys. In FY2019 end, ASPHL commissioned a 117-key property in Kolkata Biswa Bangla under the long-term lease model. The same has been developed by the Government of West Bengal and will be managed by ASPHL.
The Indian hospitality industry experienced a prolonged downturn during FY2009-FY2015 due to excess supply in several key markets in India. However, it posted an improvement in the next 2-3 years before the pandemic hit. ASPHL's properties have recorded a considerable increase in both average room rates (AR) and occupancy levels during FY2017 to FY2020, with the average occupancy across the properties standing at 86% before the lockdown. However, the pandemic adversely impacted occupancy and AR in FY2021. The occupancy levels hovered around 85% and 79% in Q3 and Q4 of FY2022, respectively, notwithstanding the recurrence of the pandemic in January 2022.
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