Chalet Hotels debuts at slight premium to issue price in volatile market

Chalet Hotels on Thursday made its debut on the bourses at a slight premium to its issue price. The stock got listed at Rs 294, a premium of five per cent to its issue price of Rs 280. The stock ended the session at Rs 292.40.

Post listing, the company commands a market capitalisation of Rs 5,986.70 crore. The Rs 1,641-crore initial public offer (IPO) of Chalet Hotels was subscribed 1.58 times last week. The offering garnered bids for 64.8 million shares as against 41 million on offer.

The institutional investor portion of the IPO was subscribed 4.6 times, and the high-net-worth individuals (HNI) portion was subscribed 1.11 times. The retail investors' portion was subscribed just two per cent.

The company allotted shares worth Rs 492 crore to 27 anchor investors, including Fidelity Funds, Goldman Sachs India, and HDFC Small Cap Fund, among others.

Chalet Hotels was the first major IPO to hit the market in nearly four months. Since October 2018, companies and bankers desisted from launching their IPOs due to volatile market conditions.  

Even Chalet Hotels had to tone down its valuations to align with the change in market conditions.

Through the IPO, the company raised Rs 950 crore by issuing fresh equity shares. The remaining Rs 691 crore was a secondary share sale by promoters.

Chalet Hotels plans to utilise the IPO proceeds to repay debts. Chalet Hotels owns and operates hotel and apartment units such as the Lakeside Chalet Marriott and the Renaissance Mumbai Hotel and Convention Centre, among others.

In 2018, 24 companies raised Rs 30,959 crore through their IPOs, while 2017 witnessed 36 companies raising Rs 67,147 crore through public issues, data from primary market tracker Prime Database shows.