Ventive Hospitality IPO: All you need to know

Ventive Hospitality IPO (initial public offering) will open for subscription on December 20, 2024, and close on December 24, 2024. Below is a breakdown of this hospitality company's strengths, weaknesses and growth prospects to help investors make an informed decision. Ventive Hospitality IPO in a nutshell Quality: During FY22-24, Ventive Hospitality reported a three-year average ROE and ROCE of 50.4 and 23.6 per cent, respectively. Growth: During FY22-24, its revenue and profit after tax grew by 44.4 and 137.7 per cent per annum, respectively. Valuation: At the upper end of the price band of Rs 643, the stock is valued at a P/E and P/B ratio of 90.3 and 2.8 times, respectively. Overview: Growing demand for tourism will help the company to scale up its business. However, increasing supply from other well-established players can impact earnings in the future. Reliance on third-party brands to operate hotels may also pose a threat to Ventive Hospitality's financials. About Ventive Hospitality Incorporated in 2002, Ventive Hospitality operates premium hotels, malls and windmills and leases commercial spaces. Ventive Hospitality's operations are based in India (Pune and Bengaluru) and the Maldives. The company owns a portfolio of high-end hospitality properties managed by global brands like JW Marriott, The Ritz-Carlton, Conrad and Anantara. As of H1 FY25, the company operates 11 hotels with 2,036 rooms. A sizable portion of Ventive Hospitality's revenue comes from its properties in Pune and the Maldives (92 per cent as of H1FY25). The company also plans to expand by developing a new hotel in Varanasi, Uttar Pradesh. Strengths of Ventive Hospitality Reputed clientele: The company's portfolio includes marquee luxury assets operated by global hospitality brands such as JW Marriott, The Ritz-Carlton, Conrad and Anantara. These brands are well-established, and all their hospitality assets are in prime locations. Weaknesses of Ventive Hospitality Debt-funded acquisitions : The company has recently acquired a new portfolio, which was funded by raising debt along with equity. This has increased the company's financial leverage. Moreover, post acquisitions, goodwill accounts for 42 per cent of Ventive Hospitality's net worth. Ventive Hospitality IPO details Total IPO size (Rs cr) 1,600 Offer for sale (Rs cr) - Fresh issue (Rs cr) 1,600 Price band (Rs) 610-643 Subscription dates December 20-24, 2024 Purpose of issue Repayment of loans Post-IPO M-cap (Rs cr) 15,016.7 Net worth (Rs cr) 5,393.0 Promoter holding (%) 89.0 Price/earnings ratio (P/E) 90.3 Price/book ratio (P/B) 2.8 Financial history Key financials (Rs cr) 2Y CAGR (%) FY24 FY23 FY22 Revenue 44.4 478.0 430.8 229.2 EBIT 85.8 235.7