Apeejay Surrendra Park Hotels to ramp up portfolio to 4,603 keys in 5 years

The Apeejay Surrendra Park Hotels is looking to augment its portfolio to 4,603 keys in the next five years. The company has 2,298 keys in its existing portfolio – across owned, leased, and managed.

Priya Paul, Chairperson, Apeejay Surrendra Park Hotels, said that the company would be building 830 rooms across five hotels in its owned portfolio in five years.

The hospitality brand, which started its first hotel on Park Street in Kolkata, has about 30 hotels across 20 cities today – 7 are owned and 3 leased. The portfolio of brands includes The Park, The Park Collection, Zone by the Park, Zone Connect by the Park.

The company is raising Rs 920 crore through an Initial Public Offering (IPO). The IPO, which opened for subscription on Monday, has a fresh issue of up to Rs 600 crore and an offer for sale component of up to Rs 320 crore.

“Out of the Rs 600 crore (fresh issue), Rs 550 crore would be used to pay off debt, making us a completely debt-free company in the foreseeable next few years,” Paul said.

The company’s net debt in FY23 had stood at Rs 550 crore.

The growth plans would be funded through internal accruals. Paul expects strong demand and firming up of room rates to play out in the next 3 to 5 years.

“First of all, there is a demand and supply mismatch. Second, consumption is coming back in India and rates are going up. We expect that to be a strong trend in the years to come,” she said.

Based on this, Paul feels that internal accruals would be significant enough to take care of all expansion plans as well as renovations of existing hotels.

The expansion of Flury’s – the tearoom and pastry shop – would also be funded from internal accruals.

There are plans of expanding the footprint of the Flury’s in Kolkata, West Bengal, Mumbai Metropolitan Region; expansion to Delhi, NCR, Hyderabad, and Pune are also in sight.

On the first day of the IPO subscription, the issue was fully subscribed and ended with 2.52 times subscription as per data available on NSE. The qualified institutional buyers (QIB) category received 1.17 times subscription, non-institutional investors 3.24 times and retail individual investors 5.70 times.