Hotel Park Land Limited (PARK) has taken a significant step towards expanding its capital base by submitting a proposal to the Securities Board of Nepal (SEBON) for an initial public offering (IPO). The company plans to issue 15 lakh shares at a par value of Rs. 100 per share, which is expected to generate Rs. 15 crore. The IPO process, managed by Citizens Capital Limited, will commence only after receiving approval from SEBON, allowing the company to offer shares to the local and general public.
Issuer Rating and Financial Outlook
CARE Ratings Nepal Limited (CRNL) has assigned an issuer rating of ‘CARE-NP BB- (Is)’ to Hotel Park Land Limited. This rating indicates a moderate risk of default concerning the timely servicing of financial obligations in Nepal. The company’s capital structure has shown signs of improvement in FY25, with tangible net worth increasing due to consistent equity infusion. The overall gearing ratio improved to 1.72x in FY25 from 2.62x in FY24, while the interest coverage ratio rose to 2.21x from 0.32x in the previous year. However, total debt relative to gross cash accrual (GCA) increased to 8.88x, highlighting the moderate leverage and debt coverage indicators in the near term.
Expansion and Upgrade Project
Hotel Park Land is currently operating 32 rooms but has embarked on a major expansion and upgrade project to increase its capacity and offerings. The hotel is being upgraded to a four-star property with 105 rooms. As of December 2025, the majority of the land acquisition has been completed, and construction work is ongoing. The total budget for the project is Rs. 1,047 million, with a proposed debt-to-equity financing mix of 42:58. A debt portion of Rs. 63 million has already been tied up.
While the expansion promises enhanced revenue potential, large-scale projects carry inherent implementation risks. Delays in execution could result in cost overruns and impact the projected cash flow timelines. The company’s ability to secure the remaining debt, implement the project within the estimated budget, and achieve timely equity infusion will be key factors in determining the financial stability and success of this expansion.
Market Risks and Competitive Landscape
The hotel industry in Nepal is highly fragmented, with a mix of organized and unorganized players operating across the country. Hotel Park Land’s primary property in Sauraha, Chitwan, exposes the company to revenue concentration risks from a single location. Occupancy rates and revenue remain sensitive to macroeconomic trends and tourism activity. The company also faces challenges from intense competition in the hospitality sector, which could affect its market share and profitability.
Furthermore, the company’s debt is tied to a floating interest rate regime. Volatile interest rates in Nepal, driven by liquidity in the banking system, could lead to increased interest expenses and affect the hotel’s liquidity position.
Strategic Advantages and Strengths
Despite these challenges, Hotel Park Land has several strengths supporting its growth prospects. With around two decades of operations, the company is led by experienced promoters and directors, including Chairman Mr. Sarad Raj Pandey, who brings over 20 years of experience in Nepal’s tourism and hospitality sector.
The hotel enjoys a strategic location in Sauraha, Chitwan, a major tourism hub with strong road connectivity and proximity to Bharatpur Airport. Its location near Chitwan National Park adds significant appeal for nature and wildlife tourism. Chitwan also serves as a gateway to western cultural and religious destinations such as Lumbini, encouraging longer stays and higher occupancy.
Government initiatives further support the sector. The FY26 budget includes tax exemptions, rebates, and concessions for hotels and resorts. The government has also allocated Rs. 13.28 billion to the Ministry of Culture, Tourism, and Civil Aviation and declared 2023–2033 as the “Tourism Decade,” highlighting the strategic importance of tourism for Nepal’s economy.
Industry Outlook
Tourism remains a key pillar of Nepal’s economy, with recovery ongoing after pandemic-induced disruptions. Tourist arrivals, which fell sharply during the pandemic, rebounded to 11.47 lakh in CY23 and continued upward into CY25. The hotel industry’s performance is closely linked to economic conditions, disposable income, and foreign tourist arrivals. While near-term disruptions such as political unrest and natural events can affect occupancy, long-term prospects remain promising given government support and increasing global interest in Nepal as a travel destination.
Company Profile
Incorporated in 2007, Hotel Park Land Limited has built a strong presence in the mid-scale hotel segment in Nepal. The current facility includes 32 rooms, a hall, and a swimming pool, with plans to expand into a 105-room, four-star hotel. The proposed IPO and ongoing expansion underscore the company’s commitment to growth and improving shareholder value.
