Ventive Hospitality IPO: A Detailed Overview for Investors

The Ventive Hospitality IPO hit the Indian primary market on December 20, 2024, and will remain open until December 24, 2024, giving investors just two days to apply. The company has set the price band for its IPO at ₹610 to ₹643 per equity share, and it has garnered significant attention. Despite the challenges faced by the Indian stock market, which saw a sharp decline last Friday, the IPO has shown a positive response.

Ventive Hospitality IPO Subscription Status

As of the first day of bidding, the IPO had already received a 71% subscription, which is considered a good response, especially given the recent market volatility. By 10:15 AM on day 2 of the bidding, the public issue was subscribed 0.75 times overall. Breaking it down by categories:

• The retail portion of the issue was subscribed 0.76 times.
• The Non-Institutional Investors (NII) segment had been subscribed 0.14 times.
• The Qualified Institutional Buyers (QIB) portion was subscribed 1.05 times.

Grey Market Premium (GMP) of Ventive Hospitality IPO

One of the most talked-about aspects of this IPO is its Grey Market Premium (GMP). Despite the market downturn, the IPO shares are trading at a ₹28 premium in the grey market. This suggests that investors in the grey market are expecting a listing gain of approximately 4% on their investment. The bullish trend in the grey market despite the broader market slump is seen as a positive indicator of investor sentiment towards the IPO.

Ventive Hospitality IPO GMP Today

As per the latest updates, the Ventive Hospitality IPO GMP stands at ₹28, which is an encouraging sign for those looking at listing gains. This premium indicates that the grey market anticipates the stock to list at a price higher than the issue price, thus providing early investors with a potential profit. The optimism in the grey market reflects confidence in the company’s prospects, particularly its growth strategy and industry outlook.

Company Overview and Financials

Ventive Hospitality Limited has a market capitalization of approximately ₹15,000 crore. The company reported an 8% year-on-year revenue increase for FY24, though its Profit After Tax (PAT) saw a significant decline of over 525%. While the financial performance shows mixed results, the company is focusing on expansion and debt reduction to improve its outlook.

IPO Review and Analyst Opinions

According to INDSEC Securities, the company’s strategy for growth and debt reduction has made it an attractive option for investors. Ventive Hospitality aims to expand its room inventory from 2,036 keys in the first half of FY25 to 2,403 keys by FY28. This expansion will diversify the company’s revenue streams, reducing its reliance on its current assets. Proceeds from this expansion are earmarked for debt reduction, which currently constitutes 27% of its sales in H1FY25. Reducing debt could improve the company’s financial position, and it is expected to support the company’s path toward profitability.

INDSEC recommends a “Subscribe” tag due to the strong growth prospects in the hospitality industry and the company’s focus on debt reduction, which could aid in turning around its financial performance. The company is also benefiting from favorable industry dynamics, including increasing urbanization, higher consumer spending, and the growing preference for chain-affiliated hotels among travelers.

However, Swastika Investmart has assigned an “Avoid” rating to the IPO, citing concerns over the company’s financial risk due to its increasing debt burden. The company’s occupancy rate of 59.5% (on a proforma basis) is also lower than the industry average of 62%, posing a potential risk to its financial performance. Swastika recommends that investors consider other options in the primary market and avoid investing in the Ventive Hospitality IPO.

Conclusion

The Ventive Hospitality IPO has sparked interest due to its growth plans, including expansion and debt reduction strategies. The grey market premium, which suggests potential listing gains, adds to its appeal. However, investors need to carefully weigh the risks, including the company’s financial health and occupancy rate, before making an investment decision.

As always, investors should consult certified experts and perform due diligence before making any decisions. Each investor’s risk tolerance, financial goals, and portfolio diversification strategy should guide their choice in this IPO.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Folkstimes. We advise investors to consult certified experts before making any investment decisions.