Aiming Higher: Manas Polymers and Energies Limited Sets Sights on Growth with Upcoming IPO
New Delhi [India], September 25: From being a Mumbai- and Gujarat-focused hospitality player to emerging as a pan-India chain with 88 operational hotels, Suba Hotels has undergone a remarkable transformation in the last five years. The company—headed by Mansur Mehta, Chairman and Managing Director of Suba Hotels Limited and his son Mubeen Mehta—pivoted from owning hotels to building an asset-light model during the pandemic. Now, as Suba Hotels Limited prepares for its ₹75.47 crore IPO opening on September 29, 2025, it is eyeing faster growth in Tier 2 and Tier 3 cities through management contracts, revenue-sharing models, and franchise expansions.
In a candid conversation, Mansur Mehta shares insights on Suba’s journey, strategy, and the road ahead.
Q1. Suba has built a strong presence in Tier 2 and Tier 3 cities. How do you see these markets driving growth for Suba Hotels compared to Tier 1 metros, and what role will IPO proceeds play in strengthening this presence?
Tier 1 metros have become highly capital-intensive with soaring land and construction costs, while guest expectations are also higher. Real growth lies in Tier 2 and 3 cities across Bharat — where property costs and manpower expenses are lower, yet demand for branded hotels is growing rapidly. Government investment in new airports, railway hubs, and infrastructure is also fueling this shift.
Our IPO proceeds will primarily support “last-mile funding” for hotels in these markets. Many hotel owners already have ready structures but need ₹3–5 lakh per room to start operations. By supporting them at this stage, we ensure quicker rollouts, faster revenue generation, and stronger brand penetration. Importantly, this funding is not one-time key money but a business advance, which comes back into our system within 6–8 months, keeping our growth capital-efficient.
Q2. Your portfolio spans owned, managed, leased, and franchised hotels. How has this asset-light model contributed to profitability, and do you plan to increase the share of any particular format post-listing?
Owning hotels is highly capital-intensive and typically takes years before returns materialise. In contrast, management contracts, leases, and revenue-share models allow us to make properties operational within 3–6 months, significantly reducing the payback period and boosting profitability. Post-listing, our focus will be on expanding the revenue-share and lease models, while strengthening our franchise portfolio under Choice Hotels’ global brands. We plan to add 600–700 rooms annually in a balanced mix — approximately 50% franchise, 40% revenue-share, and 10% management contracts.
Q3. You plan to allocate a significant portion of IPO proceeds towards the upgradation and last-mile funding of hotel premises. Could you share more details on priority projects or regions that will benefit from this investment?
Yes, the upgradation portion is for our existing hotels in Baroda, Ahmedabad, Bhuj, and Junagadh — many of which are 7–8 years old and due for refurbishment. Fresh interiors and systems can instantly push Average Room Rate (ARR) up by ₹500–1,000.
For expansion, we already have properties in Bangalore, Jaipur, and Andhra Pradesh lined up, expect to start operations within 4–6 months. Deploying IPO funds here ensures a quick revenue runway and faster visibility of returns for our investors.
Q4. Suba holds exclusive master franchise rights for global brands like Comfort, Clarion, and Quality. How have these partnerships strengthened your positioning in India’s hospitality sector, and are there plans to expand into other international collaborations?
Our partnership with Choice Hotels, signed in 2022 for 15 years, gives us exclusive rights for Comfort, Clarion, and Quality in India. With a 70-million-member global loyalty program, these brands strengthen our appeal for both corporate and international travelers. Today, nearly 2,000 of our rooms operate under these banners, giving us a strong premium positioning.
As per the contract, we are exclusively tied to Choice Hotels and cannot pursue other international tie-ups. But since Choice is itself expanding aggressively — including acquiring Radisson Americas — our partnership is a rock-solid, long-term advantage for Suba, our shareholders, and our hotel partners.
Q5. In FY25, Suba achieved an EBITDA margin of 29.09% and PAT margin of 18.94%. How sustainable are these margins in the medium term, especially amid rising competition and cost pressures in the hospitality sector?
These margins are the result of disciplined cost management, our asset-light model, and a strong distribution system. The seasonality of the hospitality industry works in our favor too, as 65% of revenues come in the second half of the year. With our current run-rate and expansion plans of adding 500–600 rooms annually, we are confident of sustaining these margins.
Competition exists, but in our target segment — ₹3,200–3,500 per night — guests prioritize quality, cleanliness, and trust. With our robust marketing, owner relationships, and focus on guest reviews, we stand apart in a crowded market.
Q6. With India’s travel demand rising across business, leisure, and religious tourism, where do you see the biggest untapped opportunities, and how does Suba plan to differentiate itself in a crowded mid-market space?
Industrial towns are the biggest untapped opportunity. Visitors to factories and business hubs often have to travel 40–50 kilometers from the nearest city. Branded hotels in these industrial zones will see consistent demand, longer stays, and repeat customers.
At the same time, religious and leisure tourism is also booming post-COVID, especially among younger travelers. However, stays there are often shorter and seasonal. That’s why our strategy is to balance both segments.
Differentiation comes from two key factors: first, our obsession with guest reviews — which we treat as the bible — ensuring trust and repeat business; second, our strong owner relationships, which make our growth scalable and sustainable.
“We are confident that Suba Hotels will continue to set new benchmarks in mid-market hospitality while delivering sustainable returns. Our IPO is fully focused on growth — not debt repayment or promoter exit — with every rupee reinvested to expand quickly yet profitably. With India’s Tier 2 and 3 cities driving the hospitality boom, Suba Hotels is uniquely positioned to create lasting value. We invite investors to join us on this journey, supported by a proven track record, strong global partnerships, and a vision to become the most trusted mid-market hospitality brand in Bharat.” – Mansur Mehta, CMD, Suba Hotels Limited
