Mahindra Holidays & Resorts IPO Price Fixed at Rs 300 per equity share

Mahindra Holidays & Resorts India Ltd ("MHRIL" or the "Company"), one of the leading leisure hospitality providers in India offering quality family holidays and a part of Mahindra Group, has fixed the price at Rs 300 per equity share for its initial public offering ("IPO") of 92,65,275 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process (the "Issue"). The Bid / Issue opened on June 23, 2009, and closed on June 26, 2009. The price band was fixed between Rs 275 and Rs 325 per equity share. The size of the issue stood at Rs 301.12 crore at the upper end of the price band and Rs 254.80 crore at the lower end of the band.

As per the initial data available on the National Stock Exchange ("NSE") website, the issue got subscribed 9.8 times with QIB portion subscribed around 12.83 times; HNIs around 11.01 times and Retail around 3.3 times. At the top end of the price band (i.e. Rs. 325) the overall issue was subscribed approximately 7.13 times with the QIB bucket approximately 8.56 times, retail investors' portion approximately 3.36 times The issue received bids for 9,08,33,800 shares as against issue size of 92,65,275 shares.

Mr. Arun Nanda, Chairman, Mahindra Holidays & Resorts India Ltd., said "I am delighted with the overwhelming investor response which demonstrates acceptance of the product concept and the business model of the company and faith in the Mahindra Group Management."

He further added, "The Mahindra Group has always believed in being investor friendly. In line with this policy, the IPO Committee has decided to price this issue in the middle of the price band at Rs 300/- per equity share, even though the issue was subscribed over 7 times at the top end of the band."

The Issue had been assigned 4 out of 5 IPO grading by Fitch Ratings India Private Ltd reflecting "above average fundamentals" of the Issue relative to other listed equity securities. The Issue comprised of a fresh issue of 58,96,084 equity shares and an offer for sale of 33,69,191 equity shares by Mahindra & Mahindra Ltd (the "selling shareholder"). The Issue constituted 11.0% of the fully diluted post-issue paid-up capital of the Company.

The proceeds from MHRIL's proposed issue are expected to be deployed in the setting up of new projects and expansion of some of the existing resorts, to provide a larger range of resorts, and hence a wider choice of holiday destinations to members. Kotak Mahindra Capital Company Ltd was the Global Coordinator and Book Running Lead Manager ("GCBRLM"), HSBC Securities and Capital Markets (India) Pvt. Ltd and SBI Capital Markets were the Book Running Lead Manager (BRLMs). The Equity Shares offered through the Prospectus ("RHP") of the Company are proposed to be listed on the National Stock Exchange of India Ltd ("NSE") and the Bombay Stock Exchange Ltd ("BSE").

MHRIL, one of the leading players in the leisure hospitality industry, offers quality family holidays primarily through vacation ownership memberships. MHRIL's flagship brand is Club Mahindra Holidays, which has been selected as Super brand 2009. MHRIL has also introduced new vacation ownership offerings such as Zest and Club Mahindra Fundays, Mahindra Homestays, travel and holiday related services through clubmahindra travel. The cumulative member base increased to 92,825 in fiscal 2009 from 38,691 in fiscal 2006. As of May 31, 2009, MHRIL has 96,067 members and 27 resorts across India and Thailand About 35.18% of new member additions in FY09 came from referrals by existing members.

Source : Equity Bulls

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