NEW DELHI: Shares of Chalet Hotels made a decent stock market debut on Thursday, as the scrip got listed at Rs 294 on NSE, a 5 per cent premium over its issue price of Rs 280 apiece.However, five minutes into trading, the scrip was down 3 per cent lower at Rs 271 apiece.The Rs 1,641-crore initial public offer (IPO) by Mumbai-based K Raheja Corp ran from January 29 to January 31 and was subscribed 1.57 times.The price band for the issue was fixed at Rs 275-280 apiece.
The issue price of the IPO was fixed at Rs 280 per share.
At the issue price, the stock is valued at a cash P/E multiple of 38.7 times compared with an average of 27.8 times for its peers.
On one-year forward EV/Ebitda, the scrip traded at 19.7 times against peers 21-22 times.Chalet has five properties which comprise 2,328 hotel rooms.
The companys hotel at Vashi, Navi Mumbai, is operated by the company under a licence agreement with Marriott.
The rest four, which include a service residence, are operated in accordance with hotel operation and related agreements with Marriott.
The hotelier has staff-to-room ratio of around 1.22 times compared with 2 times for peers operating in the same category.
In addition, the company is among the efficient energy users, which has helped it generate higher margin compared with peers.For the year ended March 2018, the companys turnover stood at Rs 930 crore with earnings before interest, depreciation, tax and amortisation (Ebidta) of Rs 350 crore.
The companys net debt as on FY 2018 was Rs 2,653 crore.
The domestic hotel industry is at an inflexion point where occupancy level is rising as demand growth is exceeding supply growth.
A slowdown in the economy, seasonal business and unexpected rise competition as cited as a possible risk to the company.