IPO closes on 28 Jul'25
Brigade Hotel Ventures Ltd
Minimum Investment
₹ 14,940 / 166 shares
Grey market premium
₹ 6 (7% premium)
Our Verdict:
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- Brigade Hotel Ventures Ltd (BHVL), a wholly-owned subsidiary of Brigade Enterprises Ltd, operates in a high-entry-barrier sector with favourable demand-supply dynamics, particularly in South India's hospitality hubs. The demand for chain-affiliated hotels has grown significantly, rising from 61,000 rooms per day in FY 2015 to 116,000 rooms per day in FY 2024, and reaching 127,000 rooms per day by the end of March 2025.
- BHVL has demonstrated consistent growth in its topline and EBITDA. Additionally, the significant debt repayment funded through IPO proceeds will boost profitability, positioning the company for stronger financial health moving forward.
- The IPO commands a P/E multiple of 125x based on FY25 earnings. Since the valuation is on the higher side, it may limit near-term upside. However, BHVL’s strong brand equity, high occupancy rates and strategic growth initiatives, coupled with favourable industry tailwinds, position it well for sustained long-term growth.
- In summary, although the valuation may cap short-term upside, BHVL's long-term outlook remains promising. This IPO is therefore best suited for investors with a long-term horizon.
About the company
Founded in
24 Aug'16
Managing director
Nirupa Shankar
- BHVL is a hotel owner and developer with a strong presence across key cities in South India, including Bengaluru, Chennai, Kochi, Mysuru and GIFT City. As of today, it operates a portfolio of 9 hotels comprising 1,604 keys.
- BHVL caters to a broad spectrum of travellers by offering properties across multiple segments — from upscale hotels aimed at premium business and luxury leisure guests to midscale accommodations designed for value-conscious travellers. Its hotel assets are operated by globally reputed hospitality brands such as Marriott International, Accor, and InterContinental Hotels Group, ensuring high service standards and international appeal.
STRENGTHS
- Market Leadership: As of March 31, 2025, BHVL stands as the second-largest owner of chain-affiliated hotels and hotel rooms in South India among major private hotel asset owners (those with at least 500 rooms across India).
- Strong Parentage: BHVL is a wholly-owned subsidiary of Brigade Enterprises, a prominent real estate developer in South India. This affiliation provides a competitive advantage in securing strategic land, facilitates cost-effective hotel development, offers easier access to financing and enhances opportunities for corporate hospitality partnerships through Brigade’s extensive network.
- Financial Progress: From FY23 to FY25, BHVL demonstrated a solid CAGR of 16% in operating revenue and 21% in EBITDA. The firm made a notable turnaround in FY24, reporting a net profit of Rs 31.14 crore compared to a loss of Rs 3.09 crore in FY23. However, the net profit declined to Rs 23.66 crore in FY25.
- Significant Deleveraging: Going forward, BHVL plans to utilize ~Rs 468 crore to repay outstanding debt from the company and its subsidiary - SRP Prosperita Hotel Ventures Ltd. This deleveraging will boost profitability, strengthen financial metrics and lay the groundwork for sustainable growth.
- Improved Hotel Occupancy: BHVL saw a significant improvement in its average hotel occupancy rate, rising from 69.59% in FY23 to 76.76% in FY25, reflecting strong demand and operational efficiency.
- Expansion Strategy: To fuel growth, BHVL has earmarked Rs 107 crore for the development of 5 new properties across South India. These additions will expand its portfolio, increasing its total inventory from 1,604 keys to ~2,600 keys by FY29.
RISK FACTORS
- Geographic Concentration: BHVL operates 9 hotels, with 4 located in Bengaluru. A significant portion of its revenue—63.21% in FY25—is derived from its Bengaluru properties. This geographic concentration poses a risk if market conditions in Bengaluru were to deteriorate or if competition in the region increases.
- Revenue Concentration: In FY25, 2 of BHVL’s Marriott-operated hotels accounted for 43.81% of its revenue from operations. Any termination or non-renewal of these agreements could adversely impact the company’s business, operational results, financial condition, and cash flow.
- Employee Attrition: BHVL’s attrition rate rose sharply to 58% in FY25, up from 48% in the previous year. High employee turnover in the hospitality industry can significantly affect service quality, which is crucial for the company’s operations. With 5 new projects in the pipeline, maintaining a stable and skilled workforce will be critical to the company’s success.
- Significant Working Capital Needs: The nature of BHVL’s business demands substantial working capital. While a significant portion of the IPO proceeds is allocated to reducing existing debt, the company may face financial pressures associated with managing working capital, particularly as it undertakes large-scale expansions. Efficient management of this capital will be essential to ensure operational stability and support growth initiatives.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 759.60 crore
Fresh Issue
₹ 759.60 crore
OFS
₹ -
Price range
₹ 85 - 90
Lot size
166 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for the following purposes:
- Pre-payment or repayment of certain outstanding borrowings incurred by the company and its material subsidiary;
- Payment of consideration for the acquisition of an undivided share of land from the Promoter, Brigade Enterprises;
- Pursuing inorganic growth opportunities, including potential acquisitions and other strategic initiatives, along with general corporate purposes.
Dates
Bidding open
24 Jul'25
Bidding close
28 Jul'25
Allotment date
29 Jul'25
Refund date
30 Jul'25
Listing
31 Jul'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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