Brigade Hotel Ventures IPO: Check out 10 key things to know from RHP before investing

Brigade Hotel Ventures IPO date of subscription is scheduled for Thursday, July 24, and will close on Monday, July 28. Brigade Hotel Ventures IPO price band has been set in the range of ₹85 to ₹90 per equity share of the face value of ₹10.

Brigade Hotel Ventures has set aside 75% of the shares in its public offering for qualified institutional buyers (QIB), 15% for non-institutional investors (NII), and 10% is designated for retail investors. An allocation of equity shares worth ₹75.96 million has been reserved for employees. Additionally, equity shares valued at ₹303.84 million have been set aside for shareholders of Brigade Enterprises Ltd (BEL).

Brigade Hotel Ventures' initial public offering consists solely of a new issuance of equity shares without any offer-for-sale (OFS) portion.

Of the total funds raised, ₹468.14 crore is set aside for paying off debts, ₹107.52 crore is earmarked for purchasing an undivided share of land from the promoter, BEL, and the rest of the money will be allocated to acquisitions, several strategic initiatives, and general corporate purposes.

Brigade Hotel Ventures IPO GMP today is +17. This indicates Brigade Hotel Ventures share price was trading at a premium of ₹17 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Brigade Hotel Ventures share price was indicated at ₹107 apiece, which is 18.89% higher than the IPO price of ₹90.

Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.

Brigade Hotel Ventures IPO - Promoters

Brigade Enterprises Ltd serves as the promoter of the company. BEL possesses 281,430,000 equity shares with a face value of ₹10 each in their company, which accounts for 95.26% of the pre-Issue issued, subscribed, and paid-up equity share capital of the company.

Brigade Hotel Ventures IPO - Peers

The company's listed peers are The Indian Hotels Company Limited (with a P/E of 56.06), EIH Limited (with a P/E of 32.20), Chalet Hotels Limited (with a P/E of 136.63), Juniper Hotels Limited (with a P/E of 99.48), Lemon Tree Hotels Limited (with a P/E of 62.04), Samhi Hotels Limited (with a P/E of 62.75), Apeejay Surendra Park Hotels Limited (with a P/E of 42.05), Ventive Hospitality (with a P/E of 115.58), ITC Hotels (with a P/E of 78.20), and Schloss Bangalore Limited (with a P/E of 229.34).

Brigade Hotel Ventures IPO - Business

Brigade Hotel Ventures specializes in owning and developing hotels in major cities across South India.

As of March 31, 2025, they rank as the second-largest owner of chain-affiliated hotels and hotel rooms in South India, which includes the states of Kerala, Andhra Pradesh, Tamil Nadu, Karnataka, Telangana, and the Union territories of Lakshadweep, Andaman and Nicobar Islands, and Pondicherry, among significant private hotel asset owners (those owning at least 500 rooms nationwide), according to the Horwath HTL Report.

Their parent company, Brigade Enterprises Limited (BEL), ventured into the hospitality sector in 2004 by launching their first hotel, Grand Mercure Bangalore, which began operations in 2009.

Brigade Hotel Ventures IPO - Portfolio

The firm boasts a collection of nine active hotels located in Bengaluru (Karnataka), Chennai (Tamil Nadu), Kochi (Kerala), Mysuru (Karnataka), and the GIFT City (Gujarat), totaling 1,604 keys.

Brigade Hotel Ventures IPO - Group Companies

The firm consists of the following Group Companies: BCV Developers Private Limited; Brigade Flexible Office Spaces Private Limited; Brigade (Gujarat) Projects Private Limited; Brigade Hospitality Services Limited; Brigade Properties Private Limited; Mysore Holdings Private Limited; Perungudi Real Estates Private Limited; SRP Gears Private Limited; Subramanian Engineering Limited; and WTC Trades & Projects Private Limited.

Brigade Hotel Ventures IPO - Management

The board of the company consists of seven members, including one Managing Director, two Non-Executive and Non-Independent Directors, and four Independent Directors. As of the date of this red herring prospectus, the company has two women serving as Directors on its Board.

Brigade Hotel Ventures IPO - Industry

As of 31 March 2025, India boasts 204,000 hotel rooms affiliated with chains, spread across various segments. The market for independent hotels remains highly fragmented, primarily consisting of midscale or lower-tier establishments.

Over the years, the composition of supply has changed, resulting in a more diverse and balanced distribution across segments, with the Luxury-Upper Upscale categories accounting for 33.9% of the supply share, 38.4% for the Upscale - Upper Midscale categories, and 27.7% for the Midscale-Economy segments as of 31 March 2025.

The geographic distribution of hotels is also expanding. The share of supply in key markets (Mumbai, Delhi-NCR, Bengaluru, Chennai, Hyderabad, Kolkata, Pune, Ahmedabad, Goa, and Jaipur) has decreased from 69% in Fiscal 2015 to 57% in fiscal 2025, and it is projected to drop to 49% by fiscal 2030; 66% of the expected supply between fiscal 2026 and fiscal 2030 is anticipated to emerge outside these key markets.

Brigade Hotel Ventures IPO - Financial

The company's profit fell by 24%, totaling ₹23.7 crore in FY25, down from ₹31.14 crore the year before. At the same time, revenue for this period increased by 16.6%, growing to ₹468.3 crore from ₹401.7 crore.

Brigade Hotel Ventures IPO - Key Risks

Some of the key risks are as follows;

1. The company has entered into agreements for hotel operator services and related contracts with Marriott, Accor, and InterContinental Hotels Group to obtain operating and marketing support for their hotels. In Fiscal 2025, two hotels managed by Marriott accounted for 43.81% of their operating revenue. If these agreements are canceled or not renewed, it could negatively impact their business, operational results, financial health, and cash flows.
2. The company employs a significant number of staff across its hotels, which may lead to exposure to service-related claims and losses or employee disruptions that could harm their reputation, business, operational results, financial health, and cash flows. The employee turnover rate in Fiscal 2025 was 58.19%.

Brigade Hotel Ventures IPO - Lock-in of equity shares allotted to anchor investors

A 90-day lock-in period will apply to 50% of the equity shares allocated to the anchor investors starting from the date of allotment, while a 30-day lock-in will pertain to the other 50% of the equity shares allotted to the anchor investors from the same date of allotment.

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