Mahindra Holidays & Resorts India Ltd (MHRL), a part of the Mahindra group, has fixed the price band between Rs 275 and Rs 325 per equity share for an 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 opens on June 23 and closes on June 26. It has been assigned four out of five IPO grading by Fitch Ratings India, reflecting above average fundamentals of the issue relative to other listed equity securities. The pre-IPO placement started January-February, 2008.

The issue comprises 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 issue would constitute 11% of the fully diluted post-issue paid up capital of the company. At least 60% of the issue will be allocated on a proportionate basis to qualified institutional buyers, out of which 5% shall be available for allocation to mutual funds only. Not less than 10% of the issue will be available for allocation to non-institutional bidders and not less than 30% of the issue will be available to retail individual bidders, subject to valid bids being received at or above the issue price.

The global coordinator and book running lead manager (GCBRLM) is Kotak Mahindra Capital Company Ltd. HSBC Securities & Capital Markets (India) Pvt Ltd and SBI Capital Markets are the BRLMs. The equity shares offered through the red herring prospectus (RHP) of the company are proposed to be listed on the National Stock Exchange of India Ltd (NSE) and the Bombay Stock Exchange (BSE).

The company plans to expand its greenfield projects in Coorg, Tungi, Theog and Ashtamudi. MHRL plans to venture in spa business as a brand. Ramesh Ramanathan, MD of MHRL, said, “We want to offer a product for senior citizens, launch budget holiday services, fractional holidays and products for teenagers as part of our future expansion strategy. We are looking for an expansion in markets like South Africa and China to increase our membership. We already have spas in our resorts in Goa, Munnar and Ashtamudi, but now we are planning to expand this in our Coorg location,” said Ramanathan.

Going public

•MHRL has fixed the price band for an IPO of 92,65,275 equity shares of Rs 10 each

•The issue would constitute 11% of the fully diluted post-issue paid up capital

•At least 60% of the issue will be allocated to qualified institutional buyers

•Lead manager for the issue is Kotak Mahindra Capital Company Ltd

•HSBC Securities & Capital Markets (India) Pvt Ltd and SBI Capital Markets are the BRLMs

•The company plans to expand its greenfield projects in Coorg, Tungi, Theog and Ashtamudi