SAMHI Hotels is looking to raise Rs 1,370 crore from its primary offering which includes a fresh equity sale of Rs 1,200 crore an OFS of 1.35 crore equity shares. 
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SAMHI Hotels is looking to raise Rs 1,370 crore from its primary offering which includes a fresh equity sale of Rs 1,200 crore an OFS of 1.35 crore equity shares. The Rs 1,370-crore initial public offering (IPO) of SAMHI Hotels saw a lackluster response from the investors during the first three hours of the bidding process on day one. The issue opened for bidding on Thursday, September 14 and will conclude for bidding on Monday, September 18. SAMHI Hotels is selling its shares in the range of Rs 119-126 apiece during the three-day bidding process and investors can make a bid of a minimum of 119 equity shares and its multiples thereafter. The issue includes a sale of fresh equity shares worth Rs 1,200 crore, while an offer-for sale (OFS) of up to 1.35 crore equity shares worth Rs 170 crore. According to the data, the investors made bids for 24,93,050 equity shares, or merely four per cent, compared to the 6,25,29,831 equity shares offered for the subscription by 1.00 pm on Thursday, September 14. The bidding was mainly led by retail investors. The allocation for retail investors was booked 20 per cent, while the portion for non-institutional investors saw a subscription of only one per cent. However, the portion reserved for qualified institutional bidders (QIBs) was not even off the mark at the same time. Incorporated in 2010, SAMHI Hotels is a professionally managed branded hotel ownership and asset management platform in India. SAMHI's hotels operate under well-recognized hotel operators such as Courtyard by Marriott, Sheraton, Hyatt Regency, Hyatt Place, Fairfield by Marriott, Four Points by Sheraton, and Holiday Inn Express. Majority of brokerages have a word of caution for the issue, citing its expensive valuations compared to peers, poor financials, seasonality in the operational performance and loss-making nature of the business. Majority of the analysts have suggested to give 'skip' to the issue. While the industry tailwinds paint a rosy picture for the business, the company-specific characteristics such as loss-making status and negative net worth for the past three fiscals - FY 21-23 paint an overall bleak picture for the business compared to improvement in metrics of its listed peers like Chalet Hotels and Indian Hotels over the fiscals, said StoxBox. "Moreover, with an asset-heavy model, the company has increased net borrowings to Rs 2,614.41 crore in FY23 from Rs 2,254.1 crore in FY21," it added with an 'avoid' rating for the issue. It has cited seasonality of business and concentration of revenue from select geographical areas as the key risk to the business. Samhi Hotels has mobilized Rs 616.54 crore from 35 anchors by allotting them 4,89,32,143 equity shares at a price of Rs 126 apiece. Anchor book of the company includes Government of Singapore, Monetary Authority of Singapore, CLSA Global Markets, Think India Opportunities Master Fund, HSBC Global, Natixis International Funds, Imco Emerging Markets Public Equity LP and more. On the back of favorable macros like continued higher domestic business & personal travels, hotel room demand in excess of supply and improving occupancy levels & room rents, the hotel sector is showing positive traction in the operating and financial performance, said Choice Broking. "SAMHI Hotels is demanding a EV/Sales multiple of 4.6 times (to its FY23 sales), which is at discount to the peer average. Its multi-brand presence across the price points is likely to benefit from this up-cycle. SAMHI has reported net loss during FY20-23, further we are anticipating continued losses in the medium term but of lower magnitude," it added with a 'subscribe with caution' rating. JM Financial and Kotak Mahindra Capital Company are the book-running managers to the issue, while Kfin Technologies has been appointed as the registrar to the issue. Shares of the company are likely to be listed on both BSE and NSE.
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