Chalet Hotels Limited which had tapped the capital markets with its simultaneous fresh issue and offer for sale was subscribed. The issue consisted of a fresh issue of Rs 950 crs and an offer for sale of 2,46,85,000 equity shares in a price band of Rs 275-280. The issue was open from Tuesday the 29th of January to Thursday the 31st of January.
Earlier the company had allotted 1,75,84,071 equity shares to 21 anchor investors comprising of 27 entities at Rs 280. The highest allocation was made to SBI Smallcap fund who was allotted 17,85,729 equity shares or 10.16% of the anchor book.
The issue was subscribed by QIB’s to the extent of 4.66 times their size after reducing the above anchor portion. HNI’s was subscribed 1.10 times and the big shocker in the issue was retail, subscribed a mere 0.03 times. The issue which needed 3.91 lac forms for one-time subscription based on minimum lot of 53 shares received just 5,250 applications.
Why this apathy even after QIB’s had already bid for the entire issue? Sheer valuation and the fact that hospitality industry has not made money for investors over a sustained period. Merchant bankers to the issue were confident that post this issue would see revival of the primary markets. Post the issue subscription one can confidently say that the same would not happen.
As far as the subscription from QIB’s is concerned, Dalal Street grapevine indicates that some Middle East investors have subscribed based on assured returns and buyback. The truth never will emerge. The fact that the promoter with the offer for sale has removed his investments in the company and would continue to own 75% of the company without any skin in the game is disheartening.
Full details of the subscription are given below: –
Chalet Hotels Subscription
| Bucket Size | Shares Applied for | Times Oversubscribed | |
| QIB | 11711444 | 54543307 | 4.66 |
| HNI | 8884569 | 9780408 | 1.10 |
| Retail | 20730659 | 583848 | 0.03 |
| Total | 41326672 | 64907563 | 1.57 |
