Wonderla Holidays To Come Out With IPO

Wonderla Holidays (WHL) is slated to come out with an IPO soon. The company has filed a DRHP with SEBI to list its equity shares on the Indian bourses.

WHL is offering 1.45 crore fresh equity shares through this offering. Currently, the company has 4.2 crore equity shares. This will be a 100% book-building issue. The price band and issue lot size have not been disclosed by the company. The book running lead managers for this issue are Edelweiss Financial Services and ICICI Securities.

At present, WHL has two amusement parks in India under the brand name ‘Wonderla'. The Karnataka-based company commenced operations of its first amusement park in the year 2000 in Kochi and came up with the second in Bengaluru in 2005. The company also runs a resort in Bengaluru under the name ‘Wonderla Resort', which initiated operations in March FY12. The amusement parks have attractive sections for all age groups. At the Kochi park, there are 22 water-based and 34 land-based attractions, while, its Bengaluru park includes 20 water-based and 33 land-based attractions. 'Wonderla Resort' is a three-star luxury resort.

On financial front, WHL's revenue increased by 26% to Rs 114.52 crore in FY12 from Rs 91.21 crore in FY11. This was mainly due to the higher sale of tickets for the parks. Meanwhile, the total expenses for the company showed a 31% increase to touch Rs 57.38 crore due to an increase in expenses in the workforce followed by a rise in the direct operating expenses. The EBITDA stood at Rs 57.14 crore, registering a growth of 20% on a YoY basis in the said period. Further, its bottomline grew to Rs 30.04 crore in FY12 against Rs 29.77 crore in FY11. The company’s net margin stood at 26.23% and the EBITDA margin stood at 49.9% in this period.

The company proposes to set up a new amusement park in Hyderabad with the amount raised from the issue. The estimated investment for the proposed expansion is Rs 250.7 crore, of which Rs 178.09 crore will be financed through the net issue proceeds. Of the remaining amount, Rs 50 crore has been raised through the State Bank of Travancore. A sum of Rs 22.61 crore has already been deployed in the project.

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 company has not disclosed the price band and issue lot size for the issue as yet, and thus, it is too early to say anything on the valuations front. Keep watching this space for more information as and when WHL comes out with other issue-related details.