NEW DELHI: Both Bharat Hotels (hotel chain LaLit) and Chalet Hotels, which were looking to announce their IPOs in the near future, are postponing their plans, given the bearish performance of the stock market lately, sources familiar with the matter said. While Bharat Hotels was planning to raise Rs 1,200 crore, Chalet Hotels had initiated the process for a Rs 950 crore initial share sale. The promoter group entities of Chalet Hotels, which owns properties including the Marriott and Renaissance in Mumbai, were also planning to sell 2.47 crore shares in the secondary market.
Industry insiders said the developments and stock markets bearish performance will impact future listings of companies in the sector which were planning to go public, buoyed by the Lemon Tree IPO. In April, budget hotel chain Lemon Trees IPO was subscribed 1.19 times. The company made a premium of 10% over the offer price after raising about Rs 1,040 crore.
“Both the companies are now considering their IPOs for the first quarter of next year if the markets improve or it could also go beyond the elections,” said an industry insider, while another added: “They were looking at launching their IPOs around this time. But everyone is waiting now.”
Bharat Hotels operates around 12 luxury hotels, palaces and resorts under The LaLiT brand and mid-market hotels under The LaLiT Traveller brand across Indias business and leisure destinations.
The company also provides management consultancy services in connection with the operation and management of a hotel in London, The LaLiT London, which offered 70 rooms. Chalet Hotels, K Raheja Corps hospitality company, owns, develops and manages assets of luxury, upscale hotels in Mumbai, Hyderabad and Bengaluru with a total of 2,328 keys as of March 31, 2018.
Bharat Hotels did not respond to an email seeking comments till the time of going to press. “We had filed the DRHP with Sebi on July 2, 2018, and have recently received Sebi observations. The IPO launch will be subject to market conditions and other considerations,” Chalet Hotels said in a statement.
An industry insider said while the companys business model and fundamentals are strong and investor response is very positive, it will wait till markets stabilise. Spiking crude oil prices, higher US Federal Reserve rates and a weak rupee led to a plunge in the stock markets this year. Around Rs 5.7 lakh crore of investor wealth was wiped out in four days of market crash in September, while a plunge in markets eroded investor wealth by over `3 lakh crore in the first half of October as per reports.