Hospitality Small-cap Stock in Focus As Company Signs Rs 209.25 Crore Deal To Acquire 90 Per Cent Stake In Luxury Hospitality Player
Over the past year, the stock has delivered a return of -23.51 per cent. It is currently trading at a Price-Earnings (PE) Ratio of 43.34.
The Apeejay Surrendra Park Hotels Limited announced the acquisition of 90 percent stake of Zillion Hotels and Resorts Private Limited through a binding Memorandum of Understanding. Zillion Hotels and Resorts Private Limited will become a subsidiary of Apeejay Surrendra Park Hotels after this acquisition. Zillion Hotels and Resorts is a company that is known for the ownership of Z Luxury Residences, a group of 62 service residences and food and beverage facilities that are located in Juhu, Mumbai.
The acquisition will cost a maximum of Rs 209.25 crore and is expected to improve Apeejay’s market share in the luxury hospitality sector. The transaction will be carried out in cash and it does not involve related party transactions. This strategic decision is in line with the expansion plans of Apeejay in the upper end of the hospitality industry.
The company was established in 1987 and it operates in the hospitality industry by providing a number of services through its luxurious hotels and varied food and beverage products. The company operates hotels in owned, leased, and managed models under five brands, namely The Park and Zone by The Park. The current number of hotels that it manages is about 34 hotels with 2,410 keys and the planned number of hotels that it intends to manage is 61 hotels with 5,048 keys.
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The company also has the retail F&B brand ‘Flurys’ which is quite prominent in the cafes and kiosks. The company has also added some new hotels in Chettinad, Patiala and Digha and several new Flurys outlets in major cities. Apeejay has also been concentrating on geographical expansion through asset light management contract model, and the planned capex for further expansion and renovations is Rs 500 crore which will be funded through real estate monetization and internal accruals.
The stock is trading at Rs 154.5, compared to its 52-week high of Rs 203.05 and 52-week low of Rs 134.2. The market capitalisation stands at Rs 3,297 crore. Over the past year, the stock has delivered a return of -23.51 per cent. It is currently trading at a Price-Earnings (PE) Ratio of 43.34. Among public shareholders, Recp IV Park Hotel Investors Ltd holds the largest stake with 2.67 per cent ownership.
Investors should keep eye on this Small-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.