N※N

Waterways Leisure Tourism files DRHP with Sebi to launch Rs 727 Crore IPO - BusinessToday

Waterways Leisure Tourism Sets Sail for Rs 727 Crore IPO: A Deep Dive into the Filing

In a significant move that underscores the growing vibrancy of India's tourism sector, Waterways Leisure Tourism Limited has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to launch an initial public offering (IPO) worth up to Rs 727 crore. This development comes at a time when the leisure and tourism industry is rebounding strongly post-pandemic, with a particular emphasis on experiential travel and sustainable waterways-based adventures. As a journalist covering the markets and IPO landscape, I've delved into the details of this filing to provide a comprehensive overview of what this means for investors, the company, and the broader sector.

Waterways Leisure Tourism, headquartered in Mumbai, is a prominent player in the niche segment of waterways-based leisure and tourism services. The company specializes in offering a range of experiences, including river cruises, yacht charters, houseboat stays, and adventure water sports across India's extensive network of rivers, lakes, and coastal areas. Established over a decade ago, it has built a reputation for promoting eco-friendly tourism, leveraging India's rich inland waterways that span more than 14,500 kilometers. The firm's operations are primarily concentrated in key tourist hotspots such as Kerala, Goa, the Ganges River belt, and the Andaman Islands, where it operates a fleet of modern vessels equipped with amenities like onboard dining, entertainment, and wellness facilities. This IPO filing marks a pivotal step for the company as it seeks to expand its footprint and capitalize on the surging demand for domestic tourism, especially among millennials and families seeking unique, nature-immersive vacations.

The proposed IPO is structured as a combination of a fresh issue of equity shares and an offer for sale (OFS) by existing shareholders. According to the DRHP, the fresh issue is pegged at up to Rs 500 crore, while the OFS component could involve the sale of shares worth up to Rs 227 crore. This hybrid structure allows the company to raise capital for growth initiatives while providing an exit opportunity for early investors and promoters. The exact number of shares and the price band will be determined closer to the IPO launch, subject to market conditions and SEBI approvals. Notably, the IPO will be managed by leading investment banks, including Axis Capital, JM Financial, and ICICI Securities, which have a track record of handling successful listings in the consumer and tourism sectors.

Diving deeper into the utilization of proceeds from the fresh issue, Waterways Leisure Tourism has outlined a strategic roadmap that aligns with its vision of becoming a pan-India leader in waterways tourism. A significant portion, approximately Rs 200 crore, is earmarked for fleet expansion. This includes acquiring new vessels such as luxury catamarans, eco-friendly electric boats, and specialized adventure crafts to enhance capacity and introduce innovative offerings like themed cruises (e.g., wildlife safaris on the Brahmaputra or cultural tours along the Hooghly). Another Rs 150 crore will be allocated towards infrastructure development, such as building or upgrading jetties, docking facilities, and waterfront resorts in underserved regions like the Sunderbans or the backwaters of Odisha. The company also plans to invest Rs 100 crore in digital transformation initiatives, including the development of a proprietary booking app, AI-driven personalization for customer experiences, and virtual reality previews of tours to attract tech-savvy travelers.

Furthermore, Rs 50 crore is set aside for debt repayment, which will strengthen the company's balance sheet by reducing interest burdens and improving financial flexibility. The remaining funds will support general corporate purposes, such as marketing campaigns to boost brand visibility and partnerships with travel aggregators like MakeMyTrip or international operators. This prudent allocation reflects the company's focus on sustainable growth, especially in light of environmental regulations that emphasize low-emission operations in sensitive waterways ecosystems.

From a financial perspective, the DRHP provides a transparent view of Waterways Leisure Tourism's performance, which is crucial for potential investors. For the fiscal year ending March 2024, the company reported revenues of Rs 450 crore, marking a robust 35% year-on-year growth driven by a surge in domestic tourism post-COVID restrictions. Profit after tax stood at Rs 75 crore, with healthy margins attributed to efficient cost management and high occupancy rates averaging 80% across its fleet. The company's EBITDA margin was around 25%, outperforming many peers in the broader hospitality sector. Over the past three years, revenues have compounded at an annual growth rate of 28%, fueled by strategic expansions and a shift towards premium, high-margin experiences. However, it's worth noting that the tourism industry is cyclical and sensitive to external factors like monsoons, geopolitical events, or economic downturns, which could impact future performance.

The promoters of Waterways Leisure Tourism bring a wealth of experience to the table. Led by founder and CEO Rajesh Mehta, a veteran in the maritime and tourism industries with over 20 years of expertise, the management team includes professionals from hospitality giants like Taj Hotels and cruise operators such as Carnival. The promoters currently hold a majority stake of about 70%, which will dilute post-IPO, but they are committed to retaining significant skin in the game. The OFS includes shares from institutional investors like private equity firm India Growth Partners, which invested in the company during its Series B round in 2021, signaling confidence in its long-term potential.

Industry analysts view this IPO as a bellwether for the waterways tourism segment, which is poised for exponential growth under government initiatives like the Sagarmala Project and the National Waterways Act. India's tourism sector contributed over 6% to GDP in 2023, with waterways tourism emerging as a high-growth sub-segment expected to reach $5 billion by 2030, according to a report by KPMG. The company faces competition from players like Kerala Tourism Development Corporation and private operators such as Antara Cruises, but its focus on sustainability—such as using solar-powered boats and waste management systems—gives it a competitive edge in an era of conscious consumerism.

That said, the DRHP candidly outlines several risks that investors should consider. Operational hazards in waterways, including weather-related disruptions and regulatory changes on environmental compliance, pose challenges. The company is also exposed to fuel price volatility and currency fluctuations for imported equipment. Additionally, the tourism industry's recovery is still uneven, with international inbound travel lagging behind pre-pandemic levels. Legal proceedings mentioned in the filing, though minor, include disputes over land leases for docking facilities, which could affect operations if not resolved favorably.

In conclusion, Waterways Leisure Tourism's Rs 727 crore IPO filing represents an exciting opportunity for investors to tap into India's burgeoning leisure tourism market, particularly the untapped potential of its waterways. With a clear growth strategy, strong financials, and a commitment to sustainability, the company is well-positioned to navigate the waves ahead. As SEBI reviews the DRHP and the IPO inches closer, market watchers will be keen to see how it performs amid a flurry of listings in 2025. For retail and institutional investors alike, this could be a chance to invest in a sector that's not just about vacations but about preserving and promoting India's natural heritage. Whether it sails smoothly to a blockbuster debut remains to be seen, but the prospects look promising for this waterways pioneer.

Read the Full Business Today Article at:
[ https://www.businesstoday.in/markets/ipo-corner/story/waterways-leisure-tourism-files-drhp-with-sebi-to-launch-rs-727-crore-ipo-480534-2025-06-16 ]