Apeejay Surrendra Park Hotels Limited has informed the Exchange about Credit Rating- Revision
PARKHOTELS · price
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On the reaction day the stock moved 4.3 pts more than Nifty Microcap 250 and 6.0 pts more than its Hotels & Resorts peers, over the same two closes: a difference in percentage points, not a measure of what the filing did.
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ICRA reviewed the credit ratings of Apeejay Surrendra Park Hotels (ASPHL) after the company announced the acquisition of a 90% stake in Zillion Hotels and Resorts, which owns a luxury property in Juhu, Mumbai with 62 service residences. Despite the Rs. 209.25 crore acquisition cost (plus an estimated Rs. 60 crore renovation), ICRA REAFFIRMED all ratings unchanged: long-term facilities at A+ (Stable) and short-term at A1, covering total bank facilities of Rs. 210 crore. ICRA noted that incremental debt for the acquisition will moderately increase leverage, but the company's strong capital structure — which improved from 3.6x debt/OPBDIT in FY23 to 0.5x in FY24 after repaying ~Rs. 550 crore debt using IPO proceeds — will keep metrics comfortable. Total debt/OPBDIT is expected to stay below the 1.7x negative trigger threshold.
Reaffirmation of the A+ (Stable) investment-grade rating despite a Rs. 209 crore acquisition is a positive signal, indicating the rating agency's confidence in ASPHL's financial health and cash flow strength. Shareholders can take comfort that the acquisition will be largely funded through internal accruals and existing cash, with leverage impact being modest rather than material.