K Raheja Corp-promoted hospitality firm Chalet Hotels Ltd and Delhi-based Bharat Hotels, which owns and operates five-star properties under The LaLiT brand, have filed their respective draft prospectuses with Securities and Exchange Board of India (SEBI) to float initial public offerings (IPOs).
The IPO of Chalet Hotels Ltd, which owns and operates hotel and apartment units such as the Lakeside Chalet Marriott Executive Service Apartments and the Renaissance Mumbai Hotel and Convention Centre, will issue fresh shares worth Rs 950 crore besides a secondary sale of 24.68 million shares by the promoter and promoter group entities.
The public issue size is estimated at Rs 1,800-2,000 crore ($262-290 million), people familiar with the development told VCCircle..
Meanwhile, the IPO of Bharat Hotels comprises fresh issue of shares worth Rs 1,200 crore (around $175 million).
The hospitality firms will join more than four dozen companies already looking to go public as they look to benefit from the boom in secondary markets.
In 2017, about three dozen companies had floated IPOs that raised nearly Rs 67,000 crore ($10.5 billion), more than double the 2016 level and four times compared with the year before.
In the hospitality space, Warburg Pincus-backed Lemon Tree Hotels Ltd went public in April through a Rs 1,038 crore ($160 million) public issue.
Other listed peers include Tata Group’s Indian Hotels Ltd, EIH Ltd, Mahindra Holidays, Hotel Leela Ventures, and Royal Orchid Hotels.
Chalet Hotels
K Raheja Corp. Pvt. Ltd, through its subsidiaries, engages in the businesses of real estate, hospitality, retailing, and power distribution in India.
The group is looking to use Rs 720 crore of the fresh net proceeds towards repayment or advance payment of certain borrowings besides using the balance amount for general corporate purposes.
Chalet was originally incorporated in January 1986 as Kenwood Hotels Pvt Ltd.
The company owns, develops and manages high-end hotels in key metro cities in India.
Its hotel platform comprises five operating hotels, including one with a co-located serviced residence, in the Mumbai Metropolitan Region, Hyderabad and Bengaluru, offering 2,328 rooms as of 31 March 2018.
JM Financial, Axis Capital and Morgan Stanley are the merchant bankers managing the share sale.
Bharat Hotels
Bharat Hotels will use Rs 900 crore of the net proceeds towards repayment or advance payment of certain borrowings besides using an undisclosed amount for general corporate purposes.
The company, which was incorporated in January 1981, is engaged in the business of operating and managing hotels, palaces and resorts, with a focus on the luxury segment.
Bharat Hotels operated 12 luxury hotels, palaces and resorts under The LaLiT brand and two mid-market segment hotels under The LaLiT Traveller brand across India‘s key business and leisure travel destinations, offering 2,261 rooms as on year ended March 2018.
In addition, the company holds exclusive rights to provide management consultancy services in connection with the operation and management of a hotel in London, The LaLiT London, which offers 70 rooms.
HDFC Bank, Edelweiss Financial Services and YES Securities are the merchant bankers managing Bharat Hotels’ IPO.
