Samhi Hotels plans to use the proceeds from the IPO partly to repay Rs9bn ($108.53m) in debt. Credit: Blue Planet Studio/Shutterstock.com.

Indian company Blue Chandra, a subsidiary of Equity International Fund V, has divested its equity shares worth Rs1.3bn ($15.68m) in Samhi Hotels prior to the hotel company’s initial public offering (IPO), according to MoneyControl.com.

This transaction saw each share priced at Rs126.

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Samhi Hotels has revealed in its public announcement that Blue Chandra has sold 10,317,460 equity shares, equivalent to 8.4% of the pre-offer paid-up equity.

Blue Chandra, which is one of the selling shareholders in Samhi’s IPO, has sold 2.38 million shares (1.94% of the pre-offer stake) valued at Rs300m to investor Madhuri Madhusudan Kela.

The company also sold 5.555 million shares (4.52% of the pre-offer stake) valued at Rs700m to Nuvama Crossover Opportunities Fund.

On September 8, San Francisco venture capital company TIMF Holdings acquired 2.38 million shares valued at Rs300m ($3.62m) in Samhi Hotels from Blue Chandra.

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Blue Chandra’s ownership in Samhi Hotels after the stake sale has dropped to 22.25%, making it the second-largest shareholder behind ACIC Mauritius, which holds 30.51%.

According to the red herring prospectus filing on September 5, the public offering of Samhi Hotels is scheduled for subscription from 14 to 18 September.

The IPO includes a Rs12bn worth of fresh share issuance by the hotel company and 13.5 million shares under offer for sale by three selling shareholders: Blue Chandra, Goldman Sachs Investments Holdings (Asia) and GTI Capital Alpha.

Presently, Goldman Sachs Investments Holdings (Asia) has a 17.94% stake and GTI Capital Alpha holds 11.2%. Sarvara Investment Fund I owns 6.68%.

The price band for the IPO is yet to be announced by Samhi Hotels.

Samhi Hotels plans to use the proceeds from the net fresh issue to repay debt of Rs9bn and allocate the rest for general corporate purposes.

JM Financial and Kotak Mahindra Capital Company are the merchant bankers for this issue.