Hotel Sabrina Limited, which is preparing to launch its Initial Public Offering (IPO), has received a CARE-NP B+ Issuer Rating from CARE Ratings Nepal, reflecting an improvement in the company’s overall business profile and growth prospects. The latest rating marks an upgrade from the B Rating assigned by ICRA Nepal in July last year, indicating progress in the company’s operational, managerial and strategic performance. The rating comes at a crucial time as the company moves ahead with plans to expand its hospitality business and enter Nepal’s capital market.
Experienced Promoters Strengthen Company’s Position
In its rating report, CARE Ratings Nepal highlighted the experience and diversified expertise of the company’s promoters and management team as one of its key strengths. According to the agency, the promoters possess extensive experience in hospitality, banking, real estate, healthcare, education, publishing, and other business sectors. Their proven track record in establishing and managing successful enterprises has provided Hotel Sabrina with strong strategic direction and operational leadership. CARE Ratings noted that the management team’s industry experience is expected to support project execution, business development and long-term sustainability.
Transformation Into Nepal’s First TRIBE Hotel
Hotel Sabrina currently operates a hospitality property in Budhanilkantha, Kathmandu, and is undertaking a major upgrade to transform it into a five-star international hotel. Once completed, the property will operate under TRIBE Kathmandu, a lifestyle hotel brand owned by French hospitality giant Accor. The project is particularly significant because it will be the first TRIBE-branded hotel in Nepal and the first in South Asia. Accor, one of the world’s largest hotel groups, manages nearly 6,000 hotels globally under renowned brands such as Mercure, Novotel, Pullman, Sofitel and Fairmont. Industry experts believe the partnership will enhance Nepal’s hospitality landscape and attract a new segment of international travelers.
Major Investment Backed by Strong Equity Contribution
The five-star hotel project involves a total investment of approximately Rs 2.14 billion and will feature around 103 to 105 luxury rooms and suites. The development is being carried out on the company’s own three ropani of land in Budhanilkantha. According to company officials, around Rs 950 million of the total investment will be financed through bank loans, while the remaining amount will be mobilized through equity investment. This means nearly 57 percent of the project cost is being funded through equity, demonstrating strong promoter commitment and reducing excessive dependence on debt financing.
IPO Application Submitted to SEBON
As part of its growth strategy, Hotel Sabrina has already applied to the Securities Board of Nepal (SEBON) for approval to issue 4.704 million ordinary shares to the public. The IPO is expected to strengthen the company’s capital base and support the completion of the hotel upgrade project. Following the public offering, the promoter group will retain an investment of approximately Rs 749.6 million in the company.
Global Brand Partnership Expected to Drive Growth
CARE Ratings has also identified the company’s partnership with Accor as a major positive factor. Through a Hotel Management Agreement and Brand Consultancy Agreement, Accor will provide international-standard operational support, brand management, marketing expertise and access to its global reservation network. The collaboration is expected to increase occupancy rates, improve room pricing, and attract both domestic and international guests. The rating agency believes that association with a globally recognized hotel brand will strengthen Hotel Sabrina’s market positioning and accelerate its operational growth after the upgraded hotel begins full operations.
Revenue Continues Despite Ongoing Construction
Despite ongoing construction and expansion activities, Hotel Sabrina has continued to generate revenue from its existing operations. The company reported revenue of approximately Rs 70 million while upgrade works were underway. Chairman Nirajan Thapa stated that although the original revenue target of Rs 120 million could not be achieved due to construction-related disruptions, generating Rs 70 million during the expansion period demonstrates the hotel’s strong business fundamentals. The company now expects to generate around Rs 90 million in annual revenue through hotel operations and property rentals.
Manageable Debt and Long-Term Financial Confidence
The company clarified that although CARE Ratings assessed facilities worth around Rs 1.25 billion, its actual borrowing requirement remains lower. Hotel Sabrina has already secured financing from Everest Bank and has utilized approximately Rs 650 million in loans to date. Management expects total borrowing to remain within Rs 950 million even after the project is fully completed. According to the company’s projections, monthly revenue of around Rs 22.5 million would be sufficient to comfortably service its debt obligations, allowing it to repay its loans within approximately nine years.
Prime Location Enhances Commercial Potential
One of Hotel Sabrina’s major advantages is its strategic location in Budhanilkantha. Situated approximately six kilometers from Tribhuvan International Airport, the hotel offers easy access for international and domestic visitors. It is also located near some of Kathmandu’s most important tourism attractions, including Pashupatinath Temple, Boudhanath, Swayambhunath and Thamel. Company officials believe that the hotel’s proximity to cultural heritage sites, diplomatic missions and high-end residential areas will contribute significantly to occupancy growth and long-term profitability.
CARE Ratings Highlights Key Challenges
While acknowledging the company’s strengths, CARE Ratings also pointed out several risks. The rating agency noted that Hotel Sabrina remains exposed to project execution risks associated with the ongoing expansion, as well as the long gestation period typical of the hospitality industry. It also cited modest financial performance, fluctuating profitability, weak cash accruals, competition within Nepal’s hotel sector and exposure to interest rate volatility under Nepal’s floating-rate banking system. Additionally, the company’s dependence on a single hotel asset creates geographic concentration risk.
Optimistic Outlook for Future Operations
Hotel Sabrina expects the upgraded TRIBE Kathmandu to reach full operational capacity by the end of 2027. Chairman Nirajan Thapa expressed confidence that the hotel’s relatively low construction cost, international branding, large rooftop restaurant, quality service standards and strategic location will help drive strong occupancy and revenue growth. He also stated that shareholders could potentially receive dividends within the first or second year after the upgraded hotel becomes fully operational.
A New Chapter in Nepal’s Hospitality Industry
With a strengthened credit profile, a planned IPO, and a landmark partnership with Accor’s TRIBE brand, Hotel Sabrina is positioning itself as one of Nepal’s most ambitious hospitality projects. Industry observers believe the successful completion of the project could not only transform the company’s fortunes but also introduce a new lifestyle hospitality concept to Nepal, further enhancing the country’s appeal as an emerging tourism and investment destination.
