A slew of initial public offers (IPOs) are hitting the market in this month. One of the latest in the offering is Lemon Tree Hotels Ltd. The issue is opening on 26th March 2018.
Recently, there has been a lot of buzz around tourism. This has led to brokerage houses initiating coverage on many hospitality companies.
So, why the sudden noise about being bullish on the hotel industry? Let us explain the same with the help of the chart:
The chart below illustrates the change in occupancy, ADR and RevPAR across India between the fiscal years 2007 and 2017:
From the above chart we can interpret few things:
This trend as witnessed in the precedding two years can improve further with introduction of e-visa and with the domestic economy improving.
Foreign Tourist Arrival (FTAs) at 101.77 lakh grew by 15.6% in FY17 as compared to a year ago. The Government of India has planned to take the FTA figure to 20 million by 2020.
Not only this, the domestic travel is also set to improve with increasing disposable income in the hands of people.
All these factors have led to the analysts being bullish on the hotel industry. Given the tailwinds, does the business model of Lemon Tree and the valuations leave any upside on the table for the investor? We would be releasing the IPO note on this Saturday. Stay tuned!
Even though a 0.25% interest rate hike is a given at today's Federal Reserve Open Market Committee meeting, there is enough suspense to keep global markets on the edges of their seats.
In the last forecast round in December, the median Fed forecast looked for three rate hikes in 2018. Most economists see the Fed sticking to this forecast but others think the odds tilt in favor of the outlook increasing to four hikes. In case the commentary tilts towards four rate hikes for 2018, there could be a correction in the stock markets globally as money shift towards safe assets such as US treasuries from equities.
For information on how to pick stocks that have the potential to deliver big returns, download our special report now!
Read the latest Market Commentary
Equitymaster requests your view! Post a comment on "Of Upcoming IPO of Lemon Tree Hotels and US Interest Rate Hike". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!