Bharat Hotels, which operates five-star properties under the LaLiT brand, and private equity investors-backed microfinance lender Spandana Spoorthy Financial Ltd have received regulatory nod to float their initial pubic offerings (IPO).
The Securities and Exchange Board of India (SEBI) issued final observations to Spandana and Bharat Hotels’ IPO proposals on 12 October.
With this, the capital markets regulator has approved 57 IPO proposals so far in 2018. In the previous year, SEBI had given out as many as 46 clearances.
Spandana had filed its draft red herring prospectus for the IPO on 26 June. The lender is is backed by homegrown PE firm Kedaara Capital, venture capital firm Helion Venture Partners and strategic investor Valiant Mauritius Partners FDI Ltd.
Spandana's IPO comprises a fresh issue of shares worth Rs 400 crore and a secondary sale of nearly 13.15 million shares by the promoters as well as institutional investors. The IPO would see the three institutional backers each sell one-fourth of their existing stakes.
The total issue size is estimated at Rs 1,000-1,200 crore ($146-175 million), persons familiar with the development had told VCCircle previously.
VCCircle had reported in March that Spandana had appointed merchant bankers for a planned IPO.
Spandana will be the latest microlender to go public after a bunch of its peers listed their shares on the stock exchanges in recent years.
While Bharat Financial Inclusion Ltd - formerly SKS Microfinance Ltd - became the first Indian microfinance institution to float an IPO, in 2010, microlenders-turned-small finance banks Equitas Holdings Ltd and Ujjivan Financial Services Ltd went public in 2016.
Microlender-turned-commercial lender Bandhan Bank floated its IPO earlier this year.
Bengaluru-based CreditAccess Grameen Ltd floated its IPO in August while Kolkata-headquartered Arohan Financial Services Pvt. Ltd is also preparing to go public.
Home-loan provider Aavas Financiers Ltd made a weak debut on the stock exchanges last week, following an IPO that failed to garner full subscription as concerns related to non-banking financial companies (NBFCs) hurt market sentiment.
Besides external factors such as the depreciation of the Indian rupee and rising crude oil prices, market sentiment has weakened in recent weeks amid fears that NBFCs and housing finance companies are facing a cash crunch.
Axis Capital, ICICI Securities, IIFL Holdings, JM Financial, IndusInd Bank, and Yes Securities are the merchant bankers managing the IPO of Spandana.
Delhi-based Bharat Hotels had filed its DRHP on 29 June. The IPO comprises a fresh issue of shares worth Rs 1,200 crore.
In the hospitality segment, Warburg Pincus-backed Lemon Tree Hotels Ltd went public in April through a Rs 1,038 crore public issue.
Other listed peers include Tata Group’s Indian Hotels Ltd, EIH Ltd, Mahindra Holidays, Hotel Leela Ventures and Royal Orchid Hotels.
Bharat Hotels was incorporated in January 1981. It operated 12 luxury hotels and resorts under The LaLiT brand and two mid-market segment hotels under The LaLiT Traveller brand, offering 2,261 rooms, as on March 2018.
In addition, the company holds exclusive rights to provide management consultancy services in connection with the operation and management of a hotel in London, The LaLiT London, which offers 70 rooms.
HDFC Bank, Edelweiss Financial Services and YES Securities are the merchant bankers managing Bharat Hotels’ IPO.