Ventive Hospitality IPO: Blackstone-Backed Public Issue Subscribed 3x On Final Day, GMP Jumps; Details

The Rs 1,600 crore initial public offering (IPO) of Ventive Hospitality is set to conclude today, Tuesday, December 24, 2024. The IPO, which opened for subscription on December 20, has drawn subdued investor interest.

IPO Details

The IPO is a book-built issue comprising a fresh issuance of nearly 2.5 crore shares, with a price band set between Rs 610 and Rs 643 per share. At the upper end, the issue represents a price-to-earnings (P/E) ratio of 40.39x, positioning it attractively against its listed competitors like Chalet Hotels (66.04x) and Indian Hotels Company (87.89x).

Investors could bid for a lot size of 23 shares, and the allocation has been divided, with 75% reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and 10% for retail investors. An additional portion has been earmarked for employees, allowing them to invest at preferential terms.

Subscription Status

As of 1:35 pm on the final bidding day, the IPO had been subscribed 3.10 times, receiving bids for 4,46,95,785 shares against the 1,44,34,453 shares on offer. Retail investors showed strong interest, with their portion subscribed 3.43 times. The NII segment subscription of 5.71 times and the QIB category garnered 1.67 times the reserved quota. Interestingly, the employee portion witnessed the highest interest, with a subscription of 7.16 times.

Grey Market Premium (GMP)

While the IPO subscription has been promising, the grey market premium (GMP) for Ventive Hospitality shares has seen a slight dip. As of today, the GMP stands at Rs 55 per share, down from its peak of Rs 67. At the upper price band of Rs 643, this suggests an estimated listing price of Rs 698 per share, a 9% premium.

Allocation & Listing Timeline

The basis of allotment for the IPO will be finalized on Thursday, December 26, with shares likely to be credited to demat accounts shortly thereafter. Unsuccessful bidders will receive refunds on the same day. Ventive Hospitality shares are expected to list on the BSE and NSE on Monday, December 30, marking its debut in the public market.

Fund Utilization

The proceeds from the IPO will be utilized for debt repayment, interest payment, investment in subsidiaries, and general corporate purposes.

Financial Highlights

Ventive Hospitality is a player in the luxury hospitality segment, catering to business and leisure markets through its extensive portfolio. Its hotels are either owned, managed, or franchised by global giants like Marriott, Hilton, Minor, and Atmosphere.

For the six months ending September 30, 2024, and the preceding fiscal years (FY24, FY23, and FY22), Ventive's revenue from hotel operations accounted for 68.47%, 72.04%, 72.71%, and 68.53% of its total income, respectively.

Ventive Hospitality enters the public market amidst stiff competition from established players like Chalet Hotels, Samhi Hotels, and Indian Hotels Company. However, its relatively lower P/E ratio compared to peers positions it as a potentially attractive investment opportunity.

Lead Managers

The IPO is being managed by a consortium of top-tier financial institutions, including JM Financial Limited, Axis Capital Limited, HSBC Securities & Capital Markets Pvt Ltd, ICICI Securities Limited, IIFL Securities Ltd, Kotak Mahindra Capital Company Limited, and SBI Capital Markets Limited. Kfin Technologies Limited serves as the registrar.