SAMHI Hotels shares deliver mild listing pop; should you hold or exit the stock?

Shares of SAMHI Hotels were listed at a mild premium on Dalal Street on Friday. However, the stock saw some profit booking at the initial stage but was back in demand among the investors, which extended the gains further. Profit booking at higher levels kept the buyers hooked to the edges.

Shares of SAMHI Hotels were listed a mild premium of 7 per cent at Rs 134.50 on NSE, against its issue price of Rs 126 apiece. However, the stock of the hotel chain began its maiden trading session at Rs 130.55 on BSE, up about 4 per cent over the given issue price.

Following the listing, shares of SAMHI Hotels gyrated between Rs 127.45 and Rs 138.40 during the day, extending the gains to 10 per cent. Analysts tracking the stock suggested investors to book profit and take the entire possible gains of the table. They do not recommend it for a long term.

As expected, SAMHI Hotels opened with marginal gains. "We, thus, advise investors who have received allotment to book profits on the listing day and evaluate the financial performance for the next few quarters for an investment decision," said said Anushi Vakharia, Research Analyst, StoxBox.

The company-specific characteristics such as loss-making status, increased borrowings and negative net worth paints a bleak picture for the business compared to its listed peers such as Chalet Hotels and Indian Hotels, she added.

The IPO of SAMHI Hotels was sold in the price band of Rs 119-126 apiece. The Rs 1,370.10 crore issue was sold between September 14-18 and investors could make a bid of a minimum of 119 equity shares. The issue of SAMHI Hotels was overall subscribed 5.57 times during the book-building process.

The company is loss-making, and its financial performance has been poor for the last three years, said Shivani Nyati, Head of Wealth, Swastika Investmart. "However, it is making progress on cutting losses, and the sales multiple is 3.7 times, less than industry average. Investors should book profit and exit their position, while those holding for the long run should maintain a stop loss at the listing price," she said.

SAMHI Hotels, a professionally managed branded hotel ownership and asset management platform, operates under well-recognized and reputed hotel operators such as Courtyard by Marriott, Sheraton, Hyatt Regency, Hyatt Place, Fairfield by Marriott, Four Points by Sheraton, and Holiday Inn Express in India.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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