The company has applied to the board to issue a total of 1.5 million 50 thousand units of ordinary shares worth 155 million rupees, each with a face value of 100 rupees.
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KTM Hospitality Limited, the operator of the 5-star luxury resort 'Royal Tulip Chitwan' in Sauraha, Chitwan, has started the process of issuing primary shares (IPO) to the general public. The company has applied to the Securities and Exchange Board of Nepal (SEBON) seeking permission to issue the IPO.
The company has applied to the board to issue a total of 1.55 million ordinary shares worth 155 million rupees each, with a face value of 100 rupees. RBB Merchant Banking is the company's share issuance and sale manager.
In the rating conducted for the IPO, Care Rating Nepal has assigned a 'Double B Minus' rating to the company. This rating indicates that there is a medium level of risk in the company's ability to meet its financial obligations. The company is projected to complete the construction of the resort in Sauraha, Chitwan at a total cost of 1.70 billion 50 million rupees.
With the issuance of the IPO, the debt to equity ratio in this project will be 61.5:38.5. That is, although the share of bank debt in the project will still be high, the company seems to be increasing the equity ratio. The company has launched a soft opening from Shrawan 2025 and fully operationalized the resort from mid-Asoj.
KTM Hospitality, which was initially established as a private limited company, was converted into a public limited company on Asad 25, 2081. The company is going to issue an IPO to further strengthen the capital structure of its project, reduce the bank's debt burden, and also to involve the general public in the investment. The report states that the IPO will be an important means of raising long-term capital as the 'gestation period' (the time it takes to return the investment) in the hotel industry is long.
The company is operating the resort under a management agreement with the 'Royal Tulip' brand under the French hotel chain 'Louvre Hotels Group'. The resort has 65 modern rooms and facilities such as a restaurant, gym, health club, swimming pool and helipad.
