The Grand Continent Hotels Initial Public Offering, which many were expecting, opened to a fairly quiet reception on the NSE SME platform even as customer anticipation fell. The company had priced the share at ₹113 per share; however, it opened at ₹112.90, including no gains from listing and bad capital erosion. Things got worse after the stock quickly went toward the lower circuit of ₹107.25 and became a 5.09% loss for IPO subscribers.
IPO Subscription and Fund Utilization
The IPO of ₹74.46 crore from March 20-24 attracted overall subscriptions of 1.79 times. Though it drew a stronger response from Qualified Institutional Buyers (QIBs), subscribing 2.93 times, both Non-Institutional Investors (NIIs) and retail investors were at 1.39 times and 1.32 times, respectively.
Out of the fresh issue of ₹70.74 crore, the company plans to allocate:
- ₹34.08 crore for loan repayment
- ₹16.8 crore for hotel expansion
- The remaining funds for general corporate purposes
Additionally, 3,28,800 shares were sold under the Offer for Sale (OFS), with proceeds going to the selling shareholders.
About Grand Continent Hotels and Financial Health
Founded in 2011, Grand Continent Hotels operates 19 properties across 6 major Indian cities, boasting over 900 rooms. Key locations include Goa, Karnataka, Tamil Nadu, Andhra Pradesh, and Telangana, with a strong presence in Bengaluru, Mysore, Hosur, Anjuna, Morjim, Tirupati, and Hyderabad.
Financially, the company has shown remarkable improvement:
- FY2022: Net loss of ₹79 lakh
- FY2023: Net profit of ₹1.05 crore
- FY2024: Net profit surged to ₹4.12 crore
- Revenue CAGR (2022-2024): Over 128% annually, reaching ₹31.53 crore
In H1 FY2025 (April-September 2024), the company reported a net profit of ₹6.81 crore and revenue of ₹31.86 crore, signaling strong growth momentum.