SAMHI Hotels IPO: GMP, Details, Price, and More

SAMHI Hotels Limited is a branded hotel ownership and asset management platform in India. SAMHI Hotels has a portfolio of 4,801 keys across 31 operating hotels in 14 of India's key urban consumption centers, including Bengaluru, Hyderabad, National Capital Region (NCR), Pune, Chennai and Ahmedabad, as of March 31, 2023. The company also has 2 hotels under development with a total of 461 keys in Kolkata and Navi Mumbai.

OBJECTS OF THE ISSUE

• Payment of certain borrowings availed of by the company and the subsidiaries.
• General corporate purposes.

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Ashish Jakhanwala

Chairman, Managing Director and Chief Executive Officer of the Company. He has been a member of the Board since December 28, 2010. He has experience in the field of hotel operations, design, consulting and investment

Gyana Das

Executive Vice President and Head of Investments of the company. He joined the Company on February 8, 2011.

Previously, he was associated with Inter Globe Hotels Private Limited.

Sanjay Jain

Senior Director - Corporate Affairs, Company Secretary and Compliance Officer of the Company. He is a member of the Institute of Company Secretaries of India and a member of the Institute of Cost and Works Accountants of India.

Rajat Mehra

Chief Financial Officer of the Company. He joined our Company on December 11, 2012. Previously, he was associated with Religare Corporate Services Limited as an executive vice president finance change management

Tanya Chakravarty

General Counsel of the Company. She joined the Company on May 2, 2017. Previously, she was associated with Phoenix Legal, Vaish Associates Advocates and Unitech Limited

COMPANY PROFILE

• The company has a branded hotel ownership and asset management platform in India, with the third- largest inventory of operational keys.
• Within 12 years of starting business operations, the Company built a portfolio of 3,839 keys across 25 operating hotels in 12 of India’s key urban consumption centers, including Bengaluru, Hyderabad, National Capital Region, Pune, Chennai, and Ahmedabad, as of March 31, 2023.
• Pursuant to the completion of the ACIC Acquisition on August 10, 2023, the company portfolio has further increased to 4,801 keys across 31 operating hotels.
• The company categorizes its hotel portfolio into three distinct hotel segments based on brand classification-Upper Upscale, Upper Mid-scale, and Mid-scale.

COMPETITIVE STRENGTHS

• Company’s ability to acquire dislocated hotels and demonstrated track record to re-rate hotel performance through renovation and/or rebranding.
• The company’s portfolio’s scale and diversification are further enhanced by sector tailwinds. The track record of managing hotels efficiently.
• It’s ability to create operating efficiencies and long-term performance using analytics tools. The company’s has strong governance and seasoned management team.

KEY STRATEGIES

• Its hotels are positioned to benefit from favorable demand trends in the hospitality industry and enhance operating efficiencies.
• Complete development of identified opportunities that are currently under development. Integrate the ACIC Portfolio to drive enhanced performance.
• Pursue growth opportunities via programmatic capital deployment, tactical mergers and acquisitions.
• Ensure disciplined capital allocation and reduction of debt.

KEY CONCERNS

• Business is subject to seasonal and cyclical variations that could result in fluctuations in results of operations.
• A significant portion of revenues are derived from a few hotels and from hotels concentrated in a few geographical regions.
• Company experienced restated losses and negative net worth in recent years.
• The hospitality industry is intensely competitive and company inability to compete effectively may adversely affect business, results of operations and financial condition.
• Company subject to extensive government regulation with respect to safety, health, environmental, real estate, excise and labor laws.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)

FINANCIALS (RESTATED CONSOLIDATED)

OUTLOOK & VALUATION

SAMHI Hotels Limited is a branded hotel ownership and asset management platform in India. The company has a track record of successfully renovating or rebranding hotels to improve performance, and it actively pursues growth prospects through tactical mergers, acquisitions and programmatic capital investment.

SHL, is currently a loss-making hospitality company. The company's financial performance has been poor for the last three years, but it is making progress on cutting losses. But business is subject to seasonal and cyclical variations that could result in fluctuations in the results of operations.

The company is loss-making, so we do not have a P/E ratio. However, its sales multiple is 3.7X, which is below when compared to the industry average. However, as the company is in financial trouble, we won't apply for this IPO.

DISCLAIMER:

The information contained herein are strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”). The contents of this document are for information purpose only. This document is not an investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company. All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment. The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document. SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk. The information contained in this document should not be construed as forecast or promise or guarantee or assurance of any kind. The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performances if any, are not indicative of future results. The actual returns on investment may be materially different than the past. Investments in Securities market products and instruments including in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low risk tolerance. Such Investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.

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