Brigade Hotel Ventures shares make weak debut, list at ₹81.10 on NSE, down 9.89% from issue price
The ₹ 759.60-crore initial public offering (IPO), with a total issue size, was open for bidding from July 24 to July 28. The issue witnessed a healthy response from investors, closing with a subscription of 4.76 times during the three-day bidding process.
The IPO attracted bids for 22.99 crore shares compared to the 4.83 crore shares on offer. The retail investor category was subscribed 6.83 times, while the non-institutional investor (NII) segment witnessed 2.03 times subscription. Meanwhile, the qualified institutional buyer (QIB) portion was bid the most, 5.74 times. Meanwhile, the employee and shareholders quota was booked 0.99 times and 3.48 times, respectively.
Brigade Hotel Ventures' initial public offering (IPO) was structured entirely as a fresh issue of 8.44 crore equity shares, with no offer-for-sale component included. The lot size was set at 166 shares, requiring retail investors to make a minimum investment of ₹ 14,110 to participate in the offer.
The total proceeds from the IPO are expected to amount to ₹ 703 crore. Of this, ₹ 468.14 crore has been earmarked for the repayment or prepayment of existing loans, highlighting the company's intent to deleverage and strengthen its financial position.
A further ₹ 107.52 crore will be used for acquiring land parcels from its parent company, Brigade Enterprises Limited (BEL), as part of its asset consolidation and strategic growth plan. The balance funds are designated for future acquisitions, expansion of the company's business operations, and general corporate purposes.
Ahead of the public issue opening, Brigade Hotel Ventures successfully raised ₹ 324.72 crore via the anchor investor route. This pre-IPO placement attracted participation from several prominent domestic mutual funds, including SBI Mutual Fund, Axis Mutual Fund, Motilal Oswal Mutual Fund, Bandhan Mutual Fund, Edelweiss Mutual Fund, 360 One Mutual Fund, and Nuvama Mutual Fund, reflecting strong institutional interest in the offer.
In terms of allocation, the IPO followed the standard quota distribution with 75 percent of the issue reserved for Qualified Institutional Buyers (QIBs), 15 percent for Non-Institutional Investors (NIIs), and 10 percent for Retail Individual Investors (RIIs).
Additionally, shares worth ₹ 75.96 crore have been set aside specifically for eligible employees of the company. Moreover, a separate reservation of shares worth ₹ 303.84 crore is made for existing shareholders of Brigade Enterprises (BEL), offering them an exclusive opportunity to participate.
JM Financial Limited acted as the book-running lead manager for the Brigade Hotel Ventures IPO, while KFin Technologies Limited served as the official registrar to the issue.
Brigade Hotel Ventures Limited (BHVL), a wholly-owned subsidiary of real estate major Brigade Enterprises Limited (BEL), is a key player in India's hospitality sector with a concentrated presence in South India. As an owner and developer of premium hotels across strategic cities, the company operates within a niche space, offering chain-affiliated properties that cater to both leisure and business travellers.
As of March 31, 2025, BHVL was ranked among the largest private hotel asset owners in South India—defined as those owning at least 500 rooms nationwide. Its portfolio spans the states of Karnataka, Kerala, Tamil Nadu, Telangana, and Andhra Pradesh, as well as Union Territories like Lakshadweep, Andaman & Nicobar Islands, and Puducherry.
In the listed space, BHVL counts notable hospitality companies as its peers. These include The Indian Hotels Company Ltd (trading at a P/E of 56.06), EIH Ltd (P/E 32.20), Chalet Hotels Ltd (P/E 136.63), Lemon Tree Hotels Ltd (P/E 62.04), Samhi Hotels Ltd (P/E 62.75), and Juniper Hotels Ltd (P/E 99.48), among others. The high P/E ratios across peers reflect the optimistic valuations in the hospitality sector, likely driven by post-COVID recovery and strong travel demand.
However, BHVL's FY25 financials presented a mixed picture. The company's revenue grew 16.6 percent year-on-year, rising to ₹ 468.3 crore from ₹ 401.7 crore, signalling a steady demand recovery and improved occupancy rates. Despite the revenue uptick, net profit fell sharply by 24 percent to ₹ 23.7 crore, compared to ₹ 31.14 crore in the previous fiscal. The drop in profitability may be attributed to higher operational costs, expansion-related expenses, or inflationary pressures impacting margins.
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