Review By Dilip Davda on September 18, 2018
• Company has only one property under management.
• Issue is by way of offer for sale only.
• Financial data is not that appealing.
• LM has poor track record.
ABOUT COMPANY:
Mac Hotels Ltd. (MHL) is the subsidiary company of Hotel Miramar Comfort Private Limited which holds 88.27% of equity shares as on date of this Prospectus. It is primarily engaged in the business of owning, operating and managing hotels, restaurants and resorts in Goa since last 25 years. MHL’s Hotels and Resorts are tourist destinations for domestic as well as international tourists and are one of the frequented hotels in Goa. At present, it operates and manages one resort under the name 'Resort Park Avenue' in Goa which is located at Umta Wado, Near Infantaria Bakery, Baga Road, Calangute, Bardez, Goa – 403 516.
ISSUE DETAILS/CAPITAL HISTORY:
For listing benefits, MHL is coming out with a maiden IPO of 810000 equity shares of Rs. 10 each at a fixed price of Rs. 24 per share by way of offer for sale to mobilize Rs. 1.94 cr. Issue opens for subscription on 19.09.18 and will close on 25.09.18. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Gretex Corporate Services Pvt. Ltd. (First draft prospectus for this issue was filed by Pantomath that now turned mandate from Gretex). Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 27% of the post issue paid up capital of the company. Company’s entire equity is issued/converted at par value. Average cost of acquisition of shares by the promoters is Rs. 10 per share. Being secondary issue, post issue, MHL’s current paid up equity capital will remain same at Rs. 3 cr.
FINANCIAL PERFORMANCE:
On financial performance front, for last four fiscals, MHL has posted total revenue/net profits of Rs. 1.93 cr. / Rs. 0.09 cr. (FY15), Rs. 1.88 cr. / Rs. 0.08 cr. (FY16), Rs. 3.10 cr. / Rs. 0.13 cr. (FY17) and Rs. 4.16 cr. / Rs. 0.41 cr. (FY18). For FY17 and FY18 MHL has shown improvement in top and bottom lines. For last three fiscals, it has posted an average EPS of Rs. 2.39 and an average RoNW of 13.86%. Issue is priced at a P/BV of 2.10 on the basis of its NAV of Rs. 11.43 as on 31.03.18 and at a P/BV of 1.58 on the basis of post issue NAV of Rs. 15.21. If we consider FY18 earnings then the issue is priced at a P/E of around 17.5 making it a fully priced offer.
COMPARE WITH LISTED PEERS:
As per offer documents, it has shown Fomento, Ras Resorts, Sinclair as its listed peers that are currently trading at a P/E s of around 24, 49 and 23 (as on 18.09.18).
MERCHANT BANKER’S TRACK RECORD:
On merchant banker’s front, this is 15th mandate from its stable in last three fiscals. Out of last 10 listings 1 opened at discount, 3 at par and the rest with a premium ranging from 1.32% to 8% on the day of listing.
Company has just one property under management. Issue is fully priced. Merchant Banker has poor track record. Cash surplus investors may consider investment at their own risk for long term.
Review By Dilip Davda on September 18, 2018
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of Mac Hotels Ltd. offers an early investment opportunity in Mac Hotels Ltd.. A stock market investor can buy Mac Hotels IPO shares by applying in IPO before Mac Hotels Ltd. shares get listed at the stock exchanges. An investor could invest in Mac Hotels IPO for short term listing gain or a long term.
Read the Mac Hotels IPO recommendations by the leading analyst and leading stock brokers.
Mac Hotels IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Mac Hotels IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Mac Hotels IPO?"
Our recommendation for Mac Hotels IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Mac Hotels IPO.
The Mac Hotels IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Mac Hotels IPO allotment status to check.
