Brigade Hotel Ventures IPO: Brigade Hotel Ventures’ initial share sale window opened on Thursday, July 24, and aims to raise Rs 759.6 crore from the primary market and will remain open until July 28. The company has fixed the price band between Rs 85 to Rs 90 per share. The issue consists of a fresh issue of equity shares with a face value of Rs 10 each. There is no offer for sale (OFS) component, which means that the entire proceeds from the offering will go directly to the company for its business objectives. Should you apply for this public issue? Know here:
Zee Business Managing Editor Anil Singhvi has advised investors to ‘AVOID’ the IPO at the current valuation, citing stretched pricing and concentration risks.
He pointed out that over 63 per cent of the company’s revenue comes from Bangalore alone and that two Marriott hotels account for 44 per cent of total revenue.
Moreover, the company’s high debt levels and rich valuations make it less attractive compared to other available options. Singhvi recommends avoiding the IPO for now and reconsidering it post-listing, depending on market conditions and pricing.
Domestic brokerages’ view on the IPO
Analysts at SBI Securities have recommended subscribing to the hospitality firm’s issue for the long term at the cut-off price for long term, citing that at the upper price band, BHVL is valued at FY25 EV/EBITDA of 19.8x. However, they (analysts) also highlighted that the company has a negative reserve and surplus of Rs 196 crore as of March 2025 due to accumulated losses in the past. “In future terms, trends in occupancy levels and ARR of the company will be key monitorables,” the brokerage said.
Anand Rathi has a ‘subscribe for long term’ rating on the IPO. According to the brokerage, the IPO is valued at a P/E of 160x to its FY25 earnings and an EBITDA of 25.3x, and it believes that the issue is fully priced.
Ventura Securities’ analysts have also suggested subscribing to the IPO for the long-term horizon.
Anchor investor
Prior to the IPO launch, the company raised Rs 324.72 crore from 17 anchor investors at the upper price band (Rs 90).
IPO allocation
Brigade Hotel Ventures has allocated 75 per cent of its IPO to qualified institutional buyers (QIBs), 15 per cent to non-institutional investors (NIIs), and the remaining 10 per cent to the retail investors.
Use of proceeds
The company plans to utilise Rs 468.14 crore from the IPO proceeds to repay outstanding debt. An additional Rs 107.52 crore will be used to purchase an undivided share of land from its promoter, Brigade Enterprises Ltd (BEL). The remaining funds will support acquisitions, strategic initiatives, and general corporate purposes.
Pre-IPO funding
Earlier this month, the company raised Rs 126 crore through a pre-IPO placement of equity shares to 360 ONE Alternates Asset Management.
BRLMs, registrar
JM Financial and ICICI Securities are serving as the book running lead managers for the IPO, with KFin Technologies appointed as the official registrar.
About Brigade Hotel Ventures
Brigade Hotel Ventures is a wholly owned subsidiary of Brigade Enterprises Ltd (BEL), a Bengaluru-based real estate firm. BEL ventured into the hospitality sector in 2004, launching its first hotel, Grand Mercure Bangalore, which began operations in 2009.
Today, the company operates a portfolio of nine hotels totalling 1,604 keys across locations including Bengaluru, Chennai, Kochi, Mysuru, and Gujarat’s GIFT City. These properties are managed by leading international hospitality brands such as Marriott, Accor, and InterContinental Hotels Group.
(Disclaimer: The views/suggestions/recommendations expressed here in this article are solely by investment experts. Zee Business suggests its readers consult their investment advisers before making any financial decision.)
