Atithi Resort and Spa Limited (ARPL) has officially added its Initial Public Offering (IPO) proposal to the Securities Board of Nepal (SEBON) pipeline, marking a significant step for the hospitality and real estate group. The proposed IPO aims to raise Rs. 16.25 crore by issuing 16,25,000 shares at a par value of Rs. 100 per share, reflecting the company’s ongoing expansion and investment strategy. The formal application was submitted to SEBON on Magh 20, 2082, with Prabhu Capital Limited appointed as the issue manager for the offering.
SEBON’s approval is a prerequisite for ARPL to officially float its shares to the public, allowing both local investors and the general public to participate in the company’s growth story.
CARE Ratings Assigns Issuer and Bank Facility Ratings
CARE Ratings Nepal Limited (CRNL) has assigned an issuer rating of ‘CARE-NP BB+’ to Atithi Resort and Spa Public Limited. This rating indicates a moderate risk of default in meeting the company’s financial obligations. Additionally, CRNL has reaffirmed the ‘CARE-NP BB-’ rating for long-term bank facilities of Atithi Suites Private Limited (ASPL), which is constructing a luxury apartment project in Pokhara.
The rating reflects a careful assessment of both project implementation risk and saleability risk. ASPL’s under-construction service apartment project is in the final stage of completion, with 87% of financial progress achieved as of January 5, 2025. While the project has secured commitments for 16 of the total 51 units, it remains exposed to risks associated with marketing, timely sales, and customer payments.
Project Details and Financial Structure
ASPL’s luxury apartment project is spread over 72,303 sq. ft. of prime Lakeside, Pokhara land and includes 51 units: 13 one-bedroom, 26 two-bedroom, 11 three-bedroom, and 1 penthouse across two towers. The project also offers amenities such as a health club, rooftop infinity pool, restaurant, children’s play area, basement parking, and fully furnished interiors.
The revised estimated cost of the project stands at Rs. 1,544 million, a 13% increase from the initial budget of Rs. 1,377 million due to imported interior finishes and increased construction interest. Financing is planned through a debt-equity-booking advance ratio of 39:12:49, with the debt portion of Rs. 597 million already fully tied up.
CRNL notes that timely project completion, cost management, and sales collection will be crucial to maintaining creditworthiness. The project will operate under a service apartment model, with ARPL managing hospitality operations through sale-and-leaseback arrangements, mainly targeting Non-Resident Nepali (NRN) investors.
Risks and Sector Outlook
The ratings reflect inherent risks associated with real estate sector cyclicality, seasonality, and interest rate volatility. Slowdowns in sales and rising input costs remain a concern for highly leveraged developers. Additionally, ASPL faces typical sectoral challenges, such as market demand fluctuations, competition for ready-to-move-in units, and potential macroeconomic impacts.
However, CRNL highlights several strengths supporting the project:
- Experienced Promoter: ASPL and ARPL are managed under Mr. Bharat Raj Sharma, who has extensive experience across hotel, real estate, and hospitality businesses in Nepal.
- Favorable Location: Situated in Lakeside, Pokhara, the project benefits from high tourism potential, accessibility, and proximity to city amenities.
- Stable Medium-Term Demand: With increasing tourist arrivals and growing investor interest in ready-to-move apartments, the sector outlook remains positive.
About Atithi Resort and Spa
Incorporated on October 12, 2011, ARPL is a 4-star resort in Pokhara, Kaski, operating 50 rooms, conference halls, restaurants, a gym, a health club, swimming pools, and a spa. The resort is strategically positioned to leverage Pokhara’s status as a major tourism and leisure destination, complementing ASPL’s upcoming service apartment project.
With the IPO in SEBON’s pipeline, Atithi Resort and Spa aims to strengthen its capital base, expand its hospitality operations, and enhance its position in Pokhara’s luxury tourism market. Once approved, the IPO will allow investors to participate in a growing hospitality and real estate ecosystem, backed by an experienced management team and strategic location. The combination of resort operations, luxury apartments, and integrated hospitality services positions Atithi Resort and Spa as a key player in Nepal’s evolving tourism and real estate sector.
