Gurugram-based SAMHI Hotels has filed its draft red herring prospectus with market regulator Securities and Exchange Board of India (SEBI) to launch an initial public offering (IPO).

The company had filed its IPO papers with Sebi in September 2019.

SAMHI's public issue comprises a fresh issue of Rs 1,000 crore and an offer for sale (OFS) of 9 million equity shares by selling shareholders, as per the draft papers.

The offer for sale (OFS) comprises up to 4.23 million equity shares by Blue Chandra Pte. Ltd., up to 2.48 million equity shares by Goldman Sachs Investments Holdings (Asia) Limited, up to 1.55 million equity shares by GTI Capital Alpha Pvt Ltd, and up to 7.39 lakh equity shares by International Finance Corporation.  It is a partial exit by the existing shareholders to meet the listing regulations.

The issue has a face value of Rs 1 per equity share for the proposed share sale. The offer is being made through the book-building process, where at least 75% of the offer will be allotted on a proportionate basis to Qualified Institutional Buyers, not more than 15% of the offer shall be available for allocation to Non-Institutional Bidders and not more than 10% of the offer shall be available for allocation to Retail Individual Bidders.

The company, Blue Chandra Pte. Ltd., and Goldman Sachs Investments Holdings (Asia) Limited, in consultation with the lead bankers to the issue, may consider a private placement of equity shares aggregating up to Rs 200 crore. If such placement is completed, the fresh issue size will be reduced.

The company will utilize net proceeds of the fresh issue of Rs 750 crore towards repayment/ prepayment/ redemption, in full or in part, of certain borrowings availed of by the Company and its Subsidiaries including payment of the interest accrued thereon and general corporate purposes

SAMHI Hotels are a prominent branded hotel ownership and asset management platform in India, with the third largest inventory of operational keys (owned and leased) in the country as of February 28, 2023, according to a JLL report mentioned in the DRHP.

It acquires or build primary hotels and thereafter renovates, rebrands, re rates the property and runs it efficiently. In just 12 years in business, it has built a portfolio of 3,839 keys spread across 25 operating hotels in 12 of India's major urban consumer hubs, including Bangalore, Hyderabad, National Capital Region ("NCR"), Pune, Chennai, and Ahmedabad as of February 28, 2023.

On March 30, 2023, SAMHI entered into a binding share subscription and purchase agreement with Asiya Capital and ACIC SPVs (the “ACIC SSPA”) to acquire 962 keys across 6 operating hotels and land to build a 350 key hotel in MIDC, Navi Mumbai. With the acquisition, SAMHI will get access to new cities like Jaipur and will improve its inventory and market share in Hyderabad, Pune, Chennai, and Ahmedabad. In addition, it plans to add two additional hotels and 617 keys in existing cities as well as two new cities, Kolkata and Navi Mumbai, increasing its presence to 14 key urban consumption centers.

It divides its hotel portfolio into three distinct hotel segments: upper upscale, upper mid-scale, and mid-scale hotels. For the six months ended September 30, 2022, more than 52.00% of its total income came from upper mid-scale and mid-scale hotels. According to a JLL study, markets with high-density demand in places like Bangalore, Hyderabad, Ahmedabad, and Pune support the upper upscale and upscale hotels, which contributed to 46.93% of its total revenue for the six months ending September 30, 2022.

Some of the marquee names in its portfolio are Hyatt Regency, Pune; Courtyard by Marriott, Bengaluru; Four Points by Sheraton (Ahmedabad & Vizag); Fairfield by Marriott in Chennai Sriperembudur, Coimbatore, Goa, Kharadi, Bengaluru) and Holiday Inn Express across Ahmedabad, Bengaluru, Pune, Gurgaon, Hyderabad, Nashik, and Chennai

SAMHI Hotels has the lowest staffing ratio among peers as of September 2022, due to their investment in technology to manage hotels, space efficiencies, and shared service centers, which has allowed them to achieve increased profitability. To centralize all essential operations among the Marriott and IHG properties it administers, it has established shared service centers.

JM Financial Limited and Kotak Mahindra Capital Company Limited are the book-running lead managers for the issue, and KFin Technologies Limited is the registrar.