Wonderla Holidays To Raise Around Rs. 160 Crore via IPO
Wonderla Holidays is offering 1.45 crore equity shares of Rs. 10 each through its IPO. The price band has been fixed between Rs. 115 and Rs. 125 per Equity Share. The minimum bid lot is 100 Equity Shares and in multiples of 100 Equity Shares thereafter. The issue opens for subscription on 21 April, 2014 and closes on 23 April, 2014. The book running lead managers for this issue are Edelweiss Financial Services and ICICI Securities.
The issue would constitute 25.66% of the fully diluted post issue paid up equity share capital of the Company. The issue has been graded by CRISIL as CRISIL IPO Grade 4/5, indicating that the fundamentals of the issue are above average relative to other listed equity securities in India. The Equity Shares offered and issued are proposed to be listed on the BSE and the NSE.
The proceeds from the Issue are proposed to be utilised by the company for the following objects:
- To set up an amusement park, Wonderla Hyderabad;
- General corporate purposes
The company intends to finance the setting up of the amusement park, Wonderla Hyderabad, through debt finance and from net proceeds. For setting up the proposed amusement park in Ranga Reddy District of Andhra Pradesh, the company has acquired 49.57 acres of land, which has been mutated in the name of the company and has been converted from agricultural to non-agricultural land use. The company intends to deploy Rs. 173.30 crore for setting up the amusement park from the Net Proceeds. The company has also been sanctioned a loan of Rs. 50 crore by the State Bank of Travancore for part financing of the amusement park project. It has also utilised Rs. 5 crore of debt for the project. Tha management confirmed that the amusement park will be operational by FY 16.
The company currently owns and operates two amusement parks under the brand name ‘Wonderla’, situated at Kochi and Bangalore. It also owns and operates a resort beside its amusement park in Bangalore under the brand name ‘Wonderla Resort’, which has been operational since March 2012.
The amusement park industry is largely dependent on domestic tourism. People visit these parks mostly during holidays, which is a peak time for the industry. It has a major entry barrier of huge capital investment and timely maintenance. Also, many existing and new entrants are operating in tier-I and tier-II cities, which makes for a highly competitive scenario. The management is confident that the company will sail through this time with strong promoters.
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