Park Hotels Ltd, an Apeejay Surrendra Group-owned company, is preparing for an initial public offering (IPO) after a delay caused by the COVID-19 pandemic. The company aims to raise ₹1,050 crore ($140 million) from the IPO, which will be used to retire its accumulated debt of ₹550 crore ($73 million), partly due to annual renovation costs.
The hotel operator, which took private equity funds in 2007, has an existing portfolio of 27 hotels and plans to add another 22 hotels. Amidst a demand-supply gap in India's hotel industry, the company intends to double its room capacity by 2028. Notably, Bengaluru alone boasts over 50,000 rooms.
The firm's record revenue of ₹524 crore ($70 million) in FY23 was fueled by several factors including the G20 Summit, Cricket World Cup, a surge in domestic arrivals by 20%, and the upcoming wedding season. Full recovery of international travel is anticipated by the first half of next year.
The food and beverage (F&B) segment is a significant contributor to Park Hotels' business, accounting for 39% of revenue in FY23 and projected to make up 44% in FY24. The F&B sector in India is currently worth ₹4.3 lakh crore ($57 billion) and is expected to reach ₹7.5 lakh crore ($100 billion) in five years.
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