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

Waterways Leisure Tourism Files DRHP with SEBI for Rs 727 Crore IPO: A Deep Dive into the Company's Ambitious Plans

In a significant development for India's burgeoning tourism sector, Waterways Leisure Tourism Limited has taken a major step towards going public by filing its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The company is aiming to raise up to Rs 727 crore through an initial public offering (IPO), marking a pivotal moment in its growth trajectory. This move not only underscores the increasing investor interest in leisure and tourism ventures but also highlights the potential of India's waterways as a key driver for economic and recreational activities. As the nation continues to recover from the pandemic-induced slowdown in travel, companies like Waterways Leisure Tourism are positioning themselves to capitalize on the resurgence in domestic and international tourism.

Waterways Leisure Tourism, headquartered in a major coastal city, specializes in providing premium leisure experiences centered around India's extensive network of rivers, lakes, and coastal waterways. Established over a decade ago, the company has carved out a niche in the tourism industry by offering a range of services including luxury cruises, adventure boating, eco-tourism packages, and waterfront hospitality. Their operations span multiple states, with a strong presence in popular destinations such as Kerala, Goa, and the Sunderbans, where they operate fleets of modern vessels equipped with state-of-the-art amenities. The firm's focus on sustainable tourism practices, such as using eco-friendly fuels and promoting biodiversity conservation, has helped it build a loyal customer base among high-net-worth individuals, families, and corporate groups seeking unique experiential travel options.

The proposed IPO, as detailed in the DRHP, consists of a fresh issue of equity shares aggregating up to Rs 500 crore, with the remaining Rs 227 crore coming from an offer for sale (OFS) by existing promoters and shareholders. This structure allows the company to infuse fresh capital into its operations while providing an exit route for early investors. The funds raised from the fresh issue are earmarked for several strategic purposes that align with the company's long-term vision. A significant portion, approximately Rs 300 crore, will be allocated towards expanding the fleet of vessels, including the acquisition of advanced cruise ships and speedboats to enhance capacity and reach new waterways. This expansion is crucial as India's inland waterways network, bolstered by government initiatives like the Sagarmala project, is undergoing rapid development, opening up untapped routes for tourism.

Additionally, Rs 150 crore is planned for the development of waterfront infrastructure, such as jetties, resorts, and experiential centers along key riverbanks. This investment aims to create integrated tourism hubs that combine leisure activities with cultural immersion, thereby attracting a broader demographic of tourists. The company also intends to use part of the proceeds for debt repayment, which will strengthen its balance sheet and reduce interest burdens, and for general corporate purposes, including marketing campaigns to boost brand visibility in international markets. By going public, Waterways Leisure Tourism seeks to leverage the capital markets to scale operations amid a favorable industry outlook, where the Indian tourism sector is projected to grow at a compound annual growth rate (CAGR) of over 10% in the coming years, driven by rising disposable incomes and government support.

Delving deeper into the company's financial performance, the DRHP provides insights into Waterways Leisure Tourism's robust growth story. Over the past three fiscal years, the company has demonstrated impressive revenue growth, with topline figures increasing from Rs 150 crore in FY22 to Rs 350 crore in FY24, reflecting a CAGR of around 53%. This surge can be attributed to the post-pandemic rebound in travel demand, coupled with the company's strategic expansions into new segments like wellness cruises and adventure tourism. Profitability has also improved, with EBITDA margins expanding to 25% in the latest fiscal year, thanks to efficient cost management and premium pricing strategies. However, like many in the tourism industry, the company faced challenges during the COVID-19 period, with revenues dipping sharply in FY21, but it has since recovered strongly, showcasing resilience and adaptability.

The IPO is being managed by a consortium of prominent investment banks, including ICICI Securities, Axis Capital, and JM Financial, who will serve as the book-running lead managers. Their involvement lends credibility to the offering, given their track record in handling successful listings in the consumer and services sectors. The pricing of the IPO will be determined through a book-building process, allowing market dynamics to set the final issue price. Investors should note that the shares are proposed to be listed on both the BSE and NSE, providing liquidity and broader market access.

From an industry perspective, Waterways Leisure Tourism's IPO comes at an opportune time. India's tourism sector is witnessing a paradigm shift, with waterways emerging as a sustainable alternative to overcrowded land-based destinations. Government policies, such as the Inland Vessels Act and investments in river cruise circuits, are fostering this growth. For instance, the development of the National Waterway-1 along the Ganges has opened up opportunities for themed cruises that blend history, spirituality, and adventure. Competitors in the space, including established players like heritage river cruise operators, are also ramping up, but Waterways Leisure Tourism differentiates itself through its focus on leisure and modern amenities, targeting the millennial and Gen-Z demographics who prioritize experiential travel over traditional sightseeing.

That said, potential investors must be aware of the risks outlined in the DRHP. The tourism industry is inherently cyclical and sensitive to external factors such as economic downturns, geopolitical tensions, and natural disasters like floods or cyclones, which could disrupt waterway operations. Regulatory changes in environmental norms or maritime safety standards could increase compliance costs. Moreover, the company's reliance on seasonal demand—peaking during winter months—poses revenue volatility risks. Competition from air and road-based tourism options, as well as emerging players in the digital travel space, adds to the challenges. Despite these, the company's strong brand equity, diversified portfolio, and strategic partnerships with travel aggregators position it well to mitigate such risks.

Looking ahead, the successful listing of Waterways Leisure Tourism could set a precedent for other niche tourism firms to tap public markets. It aligns with broader national goals of promoting inland waterways as engines of economic growth, creating jobs in hospitality, logistics, and allied sectors. For retail and institutional investors, this IPO represents an opportunity to participate in a high-growth story within India's vibrant tourism landscape. As SEBI reviews the DRHP, market watchers will be keenly observing the regulatory feedback and any revisions to the offer document.

In conclusion, Waterways Leisure Tourism's Rs 727 crore IPO filing is more than just a financial milestone; it's a testament to the untapped potential of India's waterways in redefining leisure tourism. By blending innovation with sustainability, the company is poised to navigate the waves of opportunity, provided it can steer clear of industry headwinds. As the IPO process unfolds, it will be fascinating to see how this venture shapes the future of experiential travel in the country. (Word count: 1,048)

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 ]