Mac Hotels Ltd. (MHL) is the subsidiary company of Hotel Miramar Comfort Private Limited which holds 88.27% of equity shares as on date of this company’s prospectus.
BUSINESS
The company is primarily engaged in the business of owning, operating and managing hotels, restaurants and resorts in Goa since the last he 25 years.
MHL’s Hotels and Resorts are tourist destinations for domestic as well as international tourists and are one of the frequented hotels in Goa. At present, it operates and manages one resort under the name “Resort Park Avenue” in Goa which is located at Umta Wado, Near Infantaria Bakery, Baga Road, Calangute, Goa – 403 516.
ISSUE
MHL is coming out with a maiden IPO of 810000 equity shares of Rs. 10 each at a fixed price of Rs. 24 per share by way of offer for sale to mobilize Rs. 1.94 cr. Issue opens for subscription on 19.09.18 and will close on 25.09.18. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter.
Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Gretex Corporate Services Pvt. Ltd. (First draft prospectus for this issue was filed by Pantomath that now turned mandate from Gretex).
Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 27% of the post issue paid up capital of the company. Company’s entire equity is issued/converted at par value. Average cost of acquisition of shares by the promoters is Rs. 10 per share. Being secondary issue, post issue, MHL’s current paid up equity capital will remain the same at Rs. 3 cr.
PERFORMANCE
On the performance front, in the last four fiscals, MHL has posted total revenue/net profits of Rs. 1.93 cr. / Rs. 0.09 cr. (FY15), Rs. 1.88 cr. / Rs. 0.08 cr. (FY16), Rs. 3.10 cr. / Rs. 0.13 cr. (FY17) and Rs. 4.16 cr. / Rs. 0.41 cr. (FY18).
For FY17 and FY18 MHL has shown improvement in top and bottom lines.
For the last three fiscals, it has posted an average EPS of Rs. 2.39 and an average RoNW of 13.86%.
Issue is priced at a P/BV of 2.10 on the basis of its NAV of Rs. 11.43 as on 31.03.18 and at a P/BV of 1.58 on the basis of post issue NAV of Rs. 15.21.
If we consider FY18 earnings then the issue is priced at a P/E of around 17.5 making it a fully priced offer.
As per offer documents, it has shown Fomento, Ras Resorts, Sinclair as its listed peers that are currently trading at a P/E s of around 24, 49 and 23 (as on 18.09.18).
On merchant banker’s front, this is 15th mandate from its stable in last three fiscals. Out of last 10 listings, one opened at discount, three at par and the rest with a premium ranging from 1.32% to 8% on the day of listing.
CONCLUSION
Company has just one property under management. Issue is fully priced. Merchant Banker has poor track record. Cash surplus investors may consider investment at their own risk for long term.
