Apeejay Surrendra Park Hotels, which owns and operates hotels under The Park brand, has filed a draft prospectus with the Securities and Exchange Board of India for an IPO.
The company plans to raise around $13.92m, with the proceeds used to pay down debt.
The IPO will see the secondary sale of shares by the company’s promoter as well as private equity investor RECP IV Park Hotel Investors, a vehicle owned by Credit Suisse.
The company currently manages 22 hotels with 1,937 rooms across 15 cities in India, with a pipeline of 1,536 rooms due to open over the next three years. It was founded in 1987 as Budget Hotels and was acquired by Apeejay Hotels Delhi in 1999.
News of the filing came just over a month after Samhi Hotels was give the go-ahead for an IPO by the Securities and Exchange Board of India. The offering included a secondary sale by Equity International, IFC, GTI Capital and Goldman Sachs.
The company plans to raise up to 11 billion rupees ($154.82m) by issuing new shares, also using the funds raised to cut debt.
According to Horwath HTL, the first half of 2019 saw revpar and ADR growth, with occupancy “inching up”, while trading conditions were softer in the second half.
The country remained a target for overseas investors. Last year saw Indian Hotels Company announce a strategic partnership with GIC, which will create an investment platform of USD600m to acquire hotels in India and, IHCL said: “Scale up and create greater enterprise value”.
The pair will acquire fully operational hotels, including distressed or underperforming properties that can be turned around. The expansion was be in keeping with IHCL’s move to asset-light growth, with the equity contribution from IHCL at 30% and the balance 70% contributed by GIC. The hotels will be put under management contracts with IHCL.
Puneet Chhatwal, managing director & CEO, IHCL said: “We are delighted to partner with GIC, one of the most reputable global investors. This collaboration is in line with Aspiration 2022 and our vision to scale up, create greater enterprise value and make IHCL South Asia’s most iconic and profitable hospitality company. Through this platform, we expect to acquire strategic and marquee assets that need new ownership, branding and positioning.”