What to Know Before Investing in Grand Continent Hotels Limited IPO?
- Admin
- Mar 20
- 3 min read
Grand Continent Hotels Limited, a prominent player in India's mid-market hospitality sector, has announced its Initial Public Offering (IPO), opening for subscription from March 20 to March 24, 2025. This IPO presents an opportunity for investors to participate in the growth of a company with a significant presence in the Indian hospitality industry.
Company Overview:
Established in 2011, Grand Continent Hotels Limited operates 19 hotels across six major Indian cities, offering over 900 rooms. The company focuses on the mid-market segment, catering to both business and leisure travelers with strategically located properties designed to provide value-for-money accommodations.
IPO Details:
Issue Period: March 20 to March 24, 2025
Price Band: ₹107 to ₹113 per equity share
Lot Size: 1,200 shares
Minimum Investment: ₹1,28,400 at the upper price band
Issue Size: ₹74.46 crore, comprising a fresh issue of ₹70.74 crore and an Offer for Sale (OFS) of ₹3.72 crore
Listing Platform: NSE SME Emerge
Financial Performance:
Grand Continent Hotels has demonstrated robust financial growth in recent years:
FY 2021-22:
Revenue: ₹6.03 crore
Net Loss: ₹0.79 crore
FY 2022-23:
Revenue: ₹17.05 crore
Net Profit: ₹1.05 crore
FY 2023-24:
Revenue: ₹31.53 crore
Net Profit: ₹4.12 crore
H1 FY 2024-25:
Revenue: ₹31.86 crore
Net Profit: ₹6.81 crore
The company's Profit After Tax (PAT) margin has improved significantly, reaching 19.53% in H1 FY 2024-25. Post-IPO, Grand Continent Hotels aims to become debt-free, further enhancing its profitability.
Utilization of IPO Proceeds:
The funds raised through the IPO are planned to be allocated as follows:
Debt Repayment: A portion of the proceeds will be used to repay existing debt, aiming to strengthen the company's balance sheet.
Expansion Plans: The company intends to expand its hotel portfolio in India, including increasing room capacity and upgrading existing properties.
General Corporate Purposes: Remaining funds will be utilized for general corporate expenses.
Subscription Status and Grey Market Premium (GMP):
On the first day of the IPO, the subscription status was as follows:
Overall Subscription: 9%
Retail Investors: 3%
Non-Institutional Investors (NIIs): 36%
In the grey market, the shares were trading at a premium of ₹0, indicating muted demand.
Key Dates:
Issue Closing Date: March 24, 2025
Basis of Allotment Finalization: March 25, 2025
Refunds Initiation: March 26, 2025
Credit of Shares to Demat Accounts: March 26, 2025
Listing Date: March 27, 2025
How to Apply:
Investors can apply for the Grand Continent Hotels IPO through various methods:
ASBA (Application Supported by Blocked Amount): Apply via your bank's net banking facility.
UPI (Unified Payments Interface): Apply through stockbrokers like Zerodha, Groww, or Shoonya.
Offline Application: Submit a physical application form at your stockbroker's office.
Investment Considerations:
Strengths:
Established Market Presence: Over a decade of experience in the mid-market hospitality sector.
Diverse Portfolio: Operating 19 hotels across major Indian cities.
Financial Growth: Consistent increase in revenue and profitability.
Risks:
Market Competition: Facing competition from established hotel chains.
Economic Sensitivity: Hospitality industry is sensitive to economic downturns.
Execution Risks: Challenges associated with expansion and debt repayment plans.
Conclusion:
Grand Continent Hotels Limited's IPO offers investors an opportunity to invest in a growing company within India's hospitality sector. However, potential investors should carefully assess the associated risks and perform due diligence before making investment decisions.
Disclaimer: This information is for educational purposes only and should not be construed as financial advice. Consult with a certified financial advisor before making any investment decisions.
sources of information: The Economic Times, Investing.com India, mint
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