Bhagwati Banquets and Hotels Ltd. (BBHL) was incorporated in November 1999 as a private limited company. The company was subsequently converted to a public limited company in April 2000. BBHL currently has a presence in Ahmedabad with its indoor catering & banquet hotel, outdoor catering, contract-catering & club rooms and restaurants.

Other business activities by promoter companies outside the purview of BBHL include banqueting (small gatherings accommodating 60 to 200 people), bakery products and a 70-room hotel in Ahmedabad. For the year ended March 2006, BBHL reported a net profit of Rs 13.7 million on operating income of Rs 230.4 million.

CRISIL Grading :

CRISIL has assigned a CRISIL IPO grade “1/5″ (pronounced “one on five”) grade to the proposed initial public offer of Bhagwati Banquets and Hotels Ltd. (BBHL). This grade indicates that the fundamentals of the issue are poor relative to other listed equity securities in India.

The grading reflects CRISIL’s opinion that the business prospects of the company’s planned 5-star hotel in Surat are significantly sub-par. The grade also reflects the underdeveloped corporate governance system in the company, the fact that other promoter owned entities operate in similar lines of business and that the current management team may need to be strengthened to carry out the company’s plan of entering the 5-star hotel business.

However, CRISIL notes the exceptionally successful track record of the promoters in the catering business in Ahmedabad aided by its large centralized kitchen and large banqueting facilities at ‘The Grand Bhagwati’.

CARE Grading:

CARE has assigned a ‘CARE IPO Grade 2′ to the proposed IPO of Bhagwati Banquets And Hotels Limited. (BBHL). ‘CARE IPO Grade 2′ indicates Below Average Fundamentals. CARE assigns IPO grades on a scale of Grade 5 to Grade 1, with Grade 5 indicating strong
fundamentals and Grade 1 indicating poor fundamentals. CARE’s IPO grading is an opinion on the fundamentals of the issuer. The grade assigned to any individual issue represents a relative assessment of the ‘fundamentals’ of the issuer. BBHL proposes an initial public offering of its 2,30,00,000 equity shares.

The grading takes into account BBHL’s well established operations in the hospitality industry at Ahmedabad, its strong position in banqueting and Food & Beverages (F&B) segments which contribute significantly to the income and satisfactory debt servicing track record. The grading is, however, constrained by significantly large size of the proposed hotel project at Surat as compared to the existing operations, relatively short track record of operations and modest corporate governance practices.

Cumulative Bid Details

Not Available at this time.