Grand Continent Hotels IPO Review is an exciting opportunity for investors. The company is all set to go public on 20th March 2025. As the Indian hospitality sector is bouncing back and growing at an incredible pace, investors are looking to invest in companies with solid fundamentals and a clear growth story. In this article, we will take a closer look at Grand Continent Hotels IPO from an investor’s perspective, covering all the key aspects – company strengths, risks, financials and valuations.
Table of Contents
#1 Grand Continent Hotels IPO Review: Company Overview
Grand Continent Hotels was incorporated in November 2011 and converted into a public company in August 2024. The company has created a niche for itself in the mid-market hotels and upscale resort space in India. It operates under well-known hospitality brands like Sarovar Portico, Golden Tulip, Regenta Inn, and its flagship Grand Continent. With 20 operational properties across Karnataka, Tamil Nadu, Andhra Pradesh, Telangana and Goa, the company’s revenue streams are well diversified – 65% from room rentals, 25% from food and beverages, and 10% from banquets and other sources.
#2 Grand Continent Hotels IPO Analysis: Industry Outlook
The Indian hospitality industry is on a growth trajectory, currently valued at INR 1.84 lakh crore in 2024 and is expected to grow at 9% CAGR till 2029. This growth is driven by domestic tourism, business travel, global events like G20 summits and MICE activities. Despite seasonal fluctuations and regulatory challenges, government initiatives like Incredible India 2.0 and UDAN have been helping the sector.
#3 Grand Continent Hotels IPO Review: IPO Details
IPO Price: INR 107 – 113 per share IPO Opening Date: 20 March 2025 IPO Closing Date: 24 March 2025 Issue Size: INR 70.50 – 74.46 crore Total Shares Offered: 65,89,200 equity shares Market Maker Reservation: 3,30,000 shares Employee Reservation: 12,000 shares Anchor Investor Reservation: 18,73,200 shares Listing Exchange: NSE EMERGE Listing Date: 27 March 2025 Qualified Institutional Buyers (QIBs): 50% Retail Individual Investors (RIBs): 35% Non-Institutional Investors (NIIs): 15%
#4 Grand Continent Hotels IPO Analysis: Financial Performance
Grand Continent Hotels has shown strong financials over the past three years. Revenue has grown from INR 6.03 crore in FY22 to INR 31.24 crore in FY24, a growth of 127.61% CAGR. EBITDA margins have averaged between 31% and 40% over the last three years, showing a strong but slightly declining trend, and the company maintains a manageable debt-to-equity ratio of 0.88x. Importantly, cash flows from operations have remained positive.
| FY 2022 | FY 2023 | FY 2024 | H1 FY 2025 | |
| Revenue | 6.03 | 16.80 | 31.24 | 31.84 |
| Expenses | 7.67 | 15.15 | 26.01 | 23.86 |
| Net income | (0.79) | 1.03 | 4.08 | 6.22 |
| Margin (%) | (13.10) | 6.13 | 13.06 | 19.54 |
| EBITDA (%) | 39.56 | 37.22 | 31.58 | 35.22 |
| ROE (%) | 0.64 | (67.66) | 0.25 | 0.17 |
| Debt/Equity | (21.02) | 62.34 | 0.88 | 0.80 |
#5 Grand Continent Hotels IPO Analysis: Use of IPO Proceeds
The company proposes to utilize the net proceeds, being the Gross Proceeds of the Fresh Issue less the Offer related expenses, towards funding the following objects:
- Repayment/ prepayment, in full or in part, of certain outstanding borrowings availed by the company – INR 34.08 crore
- Expansion of its hotel properties in India – INR 16.79 crore
- General Corporate Purpose
#6 Grand Continent Hotels IPO Review: Promoters and Management
The company’s leadership is helmed by Mr. Ramesh Siva and Mrs. Vidya Ramesh, who hold a combined pre-IPO stake of 92.4%, which will dilute to 68.2% post-issue. Supporting them are Mr. Mithun Jayaraman (CFO) and Ms. Aastha Kochar (Company Secretary), bringing significant industry experience.
#7 Grand Continent Hotels IPO Analysis – Comparison with Listed Peers
| Grand Continent Hotels | Indian Hotels | Lemon Tree Hotels | |
| P/E Ratio (x) | 24 | 45 | 35 |
| EV/EBITDA (x) | 14.3 | 20.1 | 19.5 |
| RONW (%) | 9.1 | 12.4 | 9.8 |
| Occupancy Rate (%) | 76 | 72 | 75 |
| Presence | Regional (South India) | Pan-India & Global | Pan-India Focus |
| Asset Model | Asset-Light + JV | Mixed Asset | Asset-Light |
| Market Cap Category | Small Cap | Large Cap | Mid Cap |
Grand Continent’s price-to-earnings ratio (P/E) of 24x is lower than Indian Hotels (45x) and Lemon Tree (35x), indicating that the IPO is priced reasonably. The company’s EV/EBITDA ratio of 14.3x also reflects better value and room for growth compared to its peers. With RONW of 9.1%, it is slightly below Indian Hotels’ 12.4% but comparable to Lemon Tree’s 9.8%. The occupancy rate of 76% highlights strong demand, even exceeding both competitors. Overall, for investors willing to take calculated risks, Grand Continent’s IPO could be a compelling opportunity.
#8 Grand Continent Hotels IPO Analysis: Key Risks and Market Challenges
- Geographic concentration risk: The DRHP mentions that 80% of hotel properties are in South India, exposing the company to local disruptions. Example: Civic unrest in Bengaluru in September 2023 disrupted hotel operations for 3 days.
- Competition pressure: Lemon Tree Hotels launched three new properties in the same regions in FY24, intensifying pricing competition.
- Debt servicing risk: The DRHP discloses INR 18 crore repayment by 2026. In 2022, OYO’s failure to service debt led to refinancing.
- Rising costs: The company’s employee expense CAGR of 18% (FY22–FY24) indicates cost pressures, as also experienced by Indian Hotels.
- Lease conflicts: Chalet Hotels faced a legal dispute in 2021 over lease renewal terms; a similar risk exists for Grand Continent.
- Unstamped leases: The DRHP acknowledges inadequately stamped agreements, similar to issues raised in Lemon Tree’s IPO prospectus.
#9 Grand Continent Hotels IPO Review: Strengths
Despite these risks, Grand Continent Hotels boasts several strengths:
Strong affiliations with premium brands such as Sarovar and Royal Orchid enhance its market position. The company reported occupancy rates of 76% in FY24, well above the industry average of 68%. Nearly 35% of bookings come from repeat customers, highlighting customer loyalty. The asset-light strategy, with several properties operated through joint ventures, reduces capital expenditure burdens and accelerates growth into Tier 2 and Tier 3 markets. The company has received industry recognition for operational excellence, with its Bengaluru property winning the “Best Mid-Market Business Hotel” award in 2023. The proprietary booking platform launched in 2024 has already handled over 25% of direct bookings, reducing dependency on third-party aggregators.
#10 Grand Continent Hotels IPO Review: Conclusion
Grand Continent Hotels faces moderate debt and regional concentration challenges, its asset-light model, premium brand affiliations, and strong financial growth make it a promising long-term investment opportunity for those looking to benefit from India’s rapidly expanding hospitality sector.
SME landscape is not affected by ongoing market turmoil. As many as 39 SME IPOs were listed from 1 January to 28 February 2025. Out of these 39, 13 SME IPOs landed in negative territory. The average listing returns stand at 18.60%. These SME IPOs cumulatively raised INR 1,827.94 crore from the market. For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.