Waterways Leisure
IPO Size: Rs. 585 cr, entirely Fresh Issue
- Rs. 480 cr for lease payments for 2 new vessels
Price band: Rs. 769-808 per share
M cap: Rs. 5,849 cr, implying 10% dilution
- Only 10% retail, as company reported loss for FY24
IPO Date: Tue 23rd Jun to Thu 25th Jun 2026, Listing Wed 1st Jul 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Domestic Cruise Operator
Waterways Leisure, or Cordelia Cruises, was established in Nov 2020, runs cruise vessel MV Empress, a 796 cabin vessel with 2,005 guest capacity, mainly operating on domestic routes like Mumbai, Goa, Cochin, Lakshadweep, Chennai, Puducherry. Since occupancy rate for this vessel has been 85% in FY26 (although dropped from 92% in FY25), 2 new cruises are being added.
Does Demand match Supply?
Forthcoming vessels, Norwegian Sky (likely by Oct 2026) and Norwegian Sun (Nov 2027), have 1,002 and 968 cabins respectively. Their guest capacity is up to 2,004 and 1,936 passengers, respectively, nearly tripling current capacity in 18 months. Total lease rental for these vessels is Rs. 1,524 cr excluding GST, of which, Rs. 480 cr is proposed to be paid from net proceeds of IPO.
While company is adding supply, the moot question is whether demand can absorb this type of supply, else risk remains of average ticket size declining. Indian cruise holiday industry is anyways very small, estimated at Rs. 830 cr in FY25, having grown at 8% CAGR since FY20. Company is a dominate player in the small market, and shoulders the responsibility to drive market demand.
Highly Susceptible to Occupancy
Even at flat average revenue per passenger per day of Rs. 12,000, company’s FY26 revenue dipped marginally by 2%. However, occupancy dropped 663 bps contracting EBITDA margin sharply. FY25 EBITDA of Rs. 215 cr (36% margin) dropped 46% YoY to Rs. 117 cr, squeezing EBITDA margin to just 20%. PBT margin slipped to Rs. 78 cr, with PAT of Rs. 52 cr for FY26, leading to 9% net margin, at EPS of Rs. 8. Equity stands at Rs. 65 cr (face value Rs. 10 each).
Even after 85% occupancy and average revenue per passenger day of Rs. 12,000, EBITDA margin is only 20% and net margin is at 9%. Hotel chains clocking similar average revenue like IHCL, ITC Hotels, EIH, Chalet etc. operate on 75% occupancy, yet clock 30%+ EBITDA. Moreover they are ruling at an EV/EBITDA multiple of 15-20x.
Expensive Pricing
M cap of Rs. 5,850 cr and Enterprise Value (EV) of Rs. 5,950 cr leads to an EV/EBITDA multiple of 51x, based on FY26 EBITDA of Rs. 117 cr, which is seen very expensive and nearly 3x the valuation multiple of hotels.
While one of the two new cruises will start contributing revenue from H1FY27E, ramp up will be gradual, as occupancy may not shoot up immediately, given average ticket size of Rs. 12,000 per passenger, not being low (is comparable to luxury hotel chains). In addition, global cruise liners like Royal Caribbean, Carnival Corporation, Norwegian Cruise operate 40+ cruise vessels each, with 104% to 108% occupancy and average ticket size 10x of Waterways. Yet 2 of the 3 are loss making, with just single digit EBITDA and high debt. Even the profitable Royal Caribbean is ruling at a PE multiple of 20x.
Thus, the business model is yet to be proven, along with company’s ability to ramp up occupancy. Moreover, till June 2025, when the DRHP was filed, there were 3 bankers to the IPO. Now on launch, only 1 remains.
