The shares of the prominent small-cap company gained up to 13 percent after the company announced an equity investment plan of up to Rs 752 crore.
Price movement
With a market capitalization of Rs 4,313.52 crore, the shares of Samhi Hotels Ltd were trading at Rs 195 per share, increasing around 12.15 percent as compared to the previous closing price of Rs 174.05 apiece.
Reason for rise
The shares of Samhi Hotels Ltd have seen positive movement after a strategic partnership with GIC to launch a platform for upscale hotel assets in India. GIC will invest Rs 752 crore for a 35 percent stake in three subsidiaries—Courtyard & Fairfield by Marriott Bengaluru ORR, Hyatt Regency Pune, and Trinity Hotel Bengaluru valued at a combined enterprise value of Rs 2,200 crore.
Additionally, out of the Rs 752 crore investment by GIC, Rs 603 crore will be used upfront to reduce debt across Samhi’s portfolio and cover minor deal expenses. The remaining Rs 149 crore will be allocated over the next two years to partially fund capex for the dual-branded Westin/Tribute hotel in Bengaluru Whitefield.
Recent events
Samhi Hotels Ltd is planning to amplify its operational capacity from 4,800 to 5,600 rooms, which will help to achieve revenue growth of 16-17 percent over the next two to three years. Same-store hotels are expected to deliver about 10-11 percent total revenue growth over a longer period, while overall margins are likely to stabilise between 40 percent and 43 percent in the near term.
Samhi Hotels plans to monetize Rs 150 crore in assets over 12-15 months to reduce debt. With Rs 100 crore from free cash flows, net debt is expected to decline by Rs 250 crore. The company targets a net debt-to-EBITDA ratio of 2.5x long-term.
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Market and Business Update
Strong office market expansion and record 77 million passenger movements drove RevPAR growth. Bangalore and Hyderabad see rising office space demand and air traffic, boosting future prospects. The company plans to double its upper upscale and upscale hotel portfolio from 1,000 to over 2,000 rooms.
Ongoing expansions include
The company’s expansions include 54 new rooms at Sheraton Hyderabad, 22 at Hyatt Regency Pune, and 330 through conversions in Pune and Jaipur. Major additions include 530 rooms at W Hotel Hyderabad and Westin Tribute Bangalore, alongside renovations at Holiday Inn Express Greater Noida.
Company Profile
SAMHI Hotels Limited is an India-based firm that offers a hotel ownership and asset management platform. The Company’s hotels fall under the Upper Upscale and Upscale, Upper Mid-scale, and Mid-scale segments. It has a portfolio of over 31 functioning hotels with 4,801 keys and a broad geographic presence in 14 locations across India.
Written by Abhishek Singh
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