Suba Hotels IPO Opens Today with ₹75 Crore Issue and ₹21.29 Crore Anchor Investment

Mumbai, 29 September 2025: Suba Hotels Limited, among India’s leading mid-market hospitality chains, has launched its ₹75 crore Initial Public Offering (IPO) today. The subscription window will remain open until 1 October 2025, with the shares scheduled to list on 7 October 2025 on NSE Emerge.

Suba Hotels IPO Subscription Opens with ₹105-₹111 Price Band and ₹75 Crore Target

Suba Hotels IPO comprises a fresh issue of 67,99,200 equity shares, priced in the band of ₹105–₹111 per share. Investors can bid for a minimum lot size of 1,200 shares, amounting to ₹1.33 lakh at the upper price band. The issue is being managed by Unistone Capital Pvt. Ltd., with Bigshare Services Pvt. Ltd. acting as registrar.

The launch underscores Suba Hotels’ effort to secure capital for expansion in India’s fast-growing travel and hospitality market. The funds raised are expected to support growth initiatives, particularly in Tier 2 and Tier 3 cities where the company already holds a significant presence.

Suba Hotels IPO Anchor Investors Commit ₹21.29 Crore Before IPO Opening

Ahead of the public subscription, Suba Hotels allotted 19,17,600 equity shares at ₹111 per share to anchor investors, raising ₹21.29 crore on 26 September 2025. The participation of multiple institutional investors highlighted early interest in the offering.

Prominent allocations included Sanshi Fund – I (₹3.33 crore), Bengal Finance & Investment Pvt. Ltd. (₹3.33 crore), and Bharat Venture Opportunities Fund (₹3.33 crore). Other participants such as Capri Global Capital Ltd. (₹1.81 crore) and Saint Capital Fund (₹2.40 crore) further diversified the anchor base.

The strong response in the anchor book is linked to Suba Hotels’ demonstrated financial growth, which has drawn attention from established domestic and global funds.

Suba Hotels IPO Revenue Has More Than Doubles in Two Years as Profit Surges 5x

Suba Hotels has shown robust financial progress over the last three years. Total income grew from ₹3,519.86 lakh in FY23 to ₹7,998.49 lakh in FY25, marking a 127% rise. Meanwhile, profit after tax (PAT) increased from ₹278.32 lakh in FY23 to ₹1,515.14 lakh in FY25, reflecting a more than fivefold jump in profitability.

Earnings per share (EPS) also grew significantly, from ₹1.60 in FY23 to ₹8.69 in FY25, supported by improved occupancy rates and operating efficiencies. The company’s net worth strengthened from ₹2,346 lakh in FY23 to ₹4,761.01 lakh in FY25, though borrowings also rose slightly to ₹5,023.31 lakh.

The financial momentum is attributed to Suba Hotels’ expansion strategy, which combined organic growth with strategic acquisitions, alongside a diversified operating model that includes owned, leased, managed, and franchised hotels.

Suba Hotels IPO Expands Mid-Market Footprint with 88 Operational Properties

Established in 1997, Suba Hotels operates 88 hotels with over 4,096 keys across 50+ cities and has another 40 properties in the pipeline. The company has carved a niche in the mid-market segment, with 81% of its portfolio located in Tier 2 and Tier 3 cities, catering to India’s growing domestic travel demand.

Its business mix is supported by strategic partnerships, most notably serving as the master franchisee for Choice Hotels in India. The group also integrated 1589 Hotels through acquisitions, further strengthening its nationwide presence.

However, Suba’s expansion model comes with dependencies. Nearly 45.6% of revenues in FY25 were derived from leased and revenue-share hotels, while 22% of bookings came through online travel agents (OTAs). This reliance increases exposure to regulatory, compliance, and cost-related risks.

Suba Hotels IPO Key Risks Emerge as Borrowings Cross ₹5,000 Lakh in FY25

Despite its growth trajectory, Suba Hotels faces challenges linked to high borrowings of over ₹5,000 lakh as of FY25, alongside regulatory compliance issues under Sections 185 and 186 of the Companies Act.

Revenue concentration in a few states, such as Gujarat and Maharashtra, adds another layer of risk, as regional performance directly influences financial outcomes. The heavy dependence on OTAs for a sizable share of bookings further underscores operational vulnerabilities in a competitive hospitality landscape.

Suba Hotels’ IPO reflects the ongoing momentum within India’s mid-market hospitality sector, backed by strong financial growth and expansion into Tier 2 and Tier 3 markets. At the same time, the company’s reliance on leased properties, regional concentration, and rising borrowings present notable challenges that will shape its future operational balance.

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