SAMHI Hotels IPO Review: SAMHI Hotels Limited is coming up with its Initial Public Offering. The IPO will open for subscription on September 14, 2023, and close on September 18, 2023.

In this article, we will look at SAMHI Hotels IPO Review 2023 and analyze its strengths, weaknesses, financials and GMP. Keep reading to find out! 

SAMHI Hotels IPO Review – About The Company

SAMHI Hotels Limited, Incorporated in 2010, is a branded hotel ownership and asset management platform in India with the 3rd largest inventory of operational keys as of FY23.

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With its presence of over a decade, the company has built a portfolio of 3,839 keys across 25 operating hotels in 12 of India’s key urban consumption centres, including Bengaluru, Hyderabad, National Capital Region, Pune, Chennai and Ahmedabad as of FY23. This portfolio has further increased to 4,801 keys across 31 operating hotels pursuant to the completion of the ACIC acquisitions.

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SAMHI’s hotels are operated by well-known hotel operators such as Courtyard by Marriott, Sheraton, Hyatt Regency, Hyatt Place, Fairfield by Marriott, Four Points by Sheraton, and Holiday Inn Express, who offer their hotels access to the operator’s loyalty programs, management and operational expertise, industry best practices, online reservation systems, and marketing strategies.

SAMHI Hotels IPO Review – Industry Overview

India being one of the most popular travel destinations across the world has resulted in the Indian tourism and hospitality industry emerging as one of the key drivers of growth among the service sectors in India. The Indian travel and tourism industry is forecasted to demonstrate strong demand growth between 2019 and 2028 with a CAGR of 10.35%. 

The Indian hospitality sector enjoys a direct boost from India’s economic growth, driven by factors like fast urbanization, expanding office markets, rising domestic travel, cost advantages compared to other economies, government initiatives, and access to a well-established talent pool. These factors ensure a robust demand for the hospitality industry in the foreseeable future.

SAMHI Hotels IPO Review – Financials

If we look at the financials of SAMHI Hotels we find out that their assets have slightly decreased from ₹2,488 crores in March 2021 to ₹2,263 crores in March 2023. 

The revenues of the company indicate a good recovery post Covid increasing four folds from ₹179.25 crores in March 2021 to ₹761.42 crores in March 2023. During the same period, its net loss has come down from ₹477.73 crores in March 2021 to ₹338.59 crores in March 2023.

Due to the company reporting consecutive losses, its reverses have come to a negative figure of ₹816.18 Crores. 

As the company is also focusing on its expansion, it has also accumulated quite a large debt of ₹2,787.54 as of FY23.

Financial Metrics 

Financial Metrics of Samhi hotels
(Source: RHP of the company)

Peers of the Company

The following image will show you the peers of the company along with their important metrics:

SAMHI Hotels IPO Review - Peers of the company
(Source: RHP of the company)

Strengths of the Company

  • The company has an acquisition and a turnaround-led strategy where it has established an asset ownership business model that has enabled it to achieve scale and earnings growth by incurring lower capital expenditures.
  • The hotels of the company are located in 12 cities in India that constitute key urban consumption centres across India. The target cities are based on macro themes such as proximity to airports and premium office space growth to ensure long-term and sustainable growth within the selected cities.
  • The company’s ability to use technology to manage hotels, space efficiencies and shared services centres enables it to achieve one of the lowest staffing ratios among peers.
  • The company has set up shared service centres with Marriott and IHG across multiple hotels. This enables it to reduce on-property staff for operational functions such as finance, engineering and procurement which helps it serve multiple hotels in a cost-efficient manner.
  • The company benefits from a cross-section of operating data that it receives on a real-time basis from its hotels. The analysis of such data helps it continuously improve performance, identify opportunities for future growth and monitor risks that it foresees.

Weaknesses of the Company

  • 10 of our 25 of the company’s operating hotels are located in buildings which have been leased to it by third parties. If the company is unable to comply with the terms of the lease agreements, renew its agreements or enter into new agreements, its business, results of operations and financial condition may be adversely affected.
  • The company may require additional equity or debt financing for its growth, which may not be available on favourable terms.
  • The company’s hotel services depend on third-party operators and service providers. Any drop in quality from these parties could harm its reputation.
  • The company has granted security interests over its certain assets in order to secure its borrowings. Failure to comply with any obligations under such borrowings may lead to a forced sale or seizure of such assets.
  • The company faces risks associated with owning and developing its hotels. Delays in the construction of new buildings or in the renovation of existing properties may have an adverse effect on its business.

SAMHI Hotels IPO Review – GMP

The shares of SAMHI Hotels traded at a premium of 7.94% in the grey market on September 12, 2023. The shares tarded at Rs 136. This gives it a premium of Rs 10 per share over the cap price of Rs 126

SAMHI Hotels IPO – Key IPO Information

ParticularsDetails
IPO Size-
Fresh Issue₹1,200.00 Cr
Offer for Sale (OFS)13,500,000 shares of ₹1
Opening dateSeptember 14, 2023
Closing dateSeptember 18, 2023
Face Value₹1 per share
Price Band₹119 to ₹126 per share
Lot Size119 Shares
Minimum Lot Size1(119 shares)
Maximum Lot Size13(1547 shares)
Listing DateSeptember 27, 2023

Promoters: The Company does not have any identifiable promoters in terms of SEBI ICDR Regulations and the Companies Act 2013.

Book Running Lead Manager: JM Financial Limited and Kotak Mahindra Capital Company Limited

Registrar to the Offer: KFin Technologies Limited

The Objective of the Issue

The net proceeds from this issue will be utilized for the following purposes:

  • Repayment/prepayment/redemption, in whole or in part, of certain borrowings availed by the company and its subsidiaries, including payment of interest accrued.
  • General corporate purposes.

In Closing

In this article, we looked at the details of SAMHI Hotels IPO Review 2023. We can conclude that, though the company faced a significant impact during the pandemic, it has exceptionally increased its revenue. But, due to the company still being in losses despite the returns, we should keep a track of how well the company will reduce its debt and expenses and turn its business profitable.

What do think the future holds for the company? Are you applying for the IPO? Let us know in the comments below.

Written By Aaron Vas

By utilizing the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks also get updated with stock market news, and make well-informed investment decisions.


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