Applying for IPO of City Hotel "Pay attention Before apply "

City Hotel Limited, incorporated on December 05, 2007, is the developer and operator of a new five-star hotel under the brand name "Hyatt Place" in Soaltee mode, Kathmandu. The Hyatt Place is a mixture of modern and cultural architecture serving its guests in various countries. The Hyatt Place, Kathmandu is operating at 10 Ropani land located at Red Cross Road, Soalteemode, Tahachal, Kathmandu, Nepal. The hotel has 153 rooms which belong to the Golyan Group of companies. The company is being promoted by 7 shareholders who have infused total paid-up equity of Rs. 1.50 arba as of now. 

Issuance Of IPO :City Hotel Limited will be issuing 13,55,940 unit IPO shares to the general public from 25th Baisakh to 28th Baisakh, 2080. If unsubscribed, the issue can be extended up to the 8th Jestha, 2080.

The company will be issuing 13,55,940 unit shares to the general public of Rs 100 face value. Out of the total 16,74,000 units; 10% i.e. 1,67,400 units have already been allotted to the Nepalese citizens working abroad, whereas 4% i.e 66,960 units have been set aside for the employees of the company and 5% of the total offered shares i.e. 83,700 units have been set aside for the mutual funds. The remaining 13,55,940 units are for the general public.

The total paid-up capital after the IPO allotment would be Rs 1.67 Arba of the company. Global IME Capital Limited has been appointed as the issue manager for the IPO issuance. Applications can be placed for a minimum of 10 units and a maximum of 2,000 units.

CARE Ratings:

CARE Ratings Nepal Limited (CRNL) has reaffirmed the issuer rating of ‘CARE-NP BB+ (Is)’ assigned to City Hotel Limited. Issuers with this rating are considered to offer a moderate risk of default regarding the timely servicing of financial obligations, in Nepal.

Key Strengths:

• Experienced directors and resourceful promoters.
• Improving operations backed by increasing occupancy.
• Association with a reputed hotel brand is likely to benefit the company in terms of marketing and hotel operations.
• Strategic locational advantage of the hotel.
• Government initiative and support for the tourism industry.

Key Weaknesses:

• Operations stabilization risk.
• Leveraged capital structure with weak debt service coverage indicators.
• Susceptibility to cyclical, intense competition, and geographic concentration risk in the hospitality sector.
• Exposure to volatile interest rate risk.

NOTE : WHILE APPLYING IN ANY COMPANY , PLEASE READ THE COMPANY PROFILE COMPLETELY . IT WILL HELP YOU TO SELECT THE BEST OPTIONS.