Mahindra Holidays & Resorts has fixed Rs 300 as the issue price for its public float, valuing the firm at Rs 2,525 crore ($525 million). At this price the hospitality firm will be able to raise Rs 278 crore. The shares are expected to start trading on the bourses in three weeks or second half of July.
The issue of 9.27 million shares, which included part selloff by its promoter Mahindra & Mahindra (M&M) was priced in the bracket of Rs 275-325/ share. At Rs 300/share it is valued 29.4 times its earnings per share for the financial year ended March 31, 2009. On a diluted basis the P/E multiple works out to a little over 30 at the issue price.
For the pre IPO investors SBI and Jacob Ballas, the issue price would translate into a dip in value of their holdings by 37%. Both the investors had picked a small stake in January 2008 at a price of Rs 479/share.