Brigade Hotel Ventures Files For IPO in India

04.11.2024 - 15:49 / skift.com / Peden Doma Bhutia

Brigade Hotel Ventures, an owner and developer of hotels primarily in South India, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The company said it aims to raise up to INR 9 billion ($107 million) via a fresh issue of equity shares.

Brigade Hotel said it may also seek to raise up to INR 1.8 billion ($21 million) through a pre-IPO placement.

In September, Schloss Bangalore, the luxury hospitality group behind India’s The Leela Palaces, filed for a $599 million (INR 50 billion) IPO, the largest ever in India’s hotel industry.

As a wholly-owned subsidiary of Brigade Enterprises, Brigade Hotel Ventures benefits from the real estate expertise of its parent company, which entered the hospitality sector in 2004. Brigade Enterprises’ move into hospitality began with the Grand Mercure Bangalore, which started operations in 2009, and has since expanded across South India, covering key states like Karnataka, Tamil Nadu, and Kerala and into Gujarat’s GIFT City.

With nine properties totaling 1,604 rooms, Brigade Hotel properties span across major urban centers such as Bengaluru, Chennai and Kochi. The company partners with global hotel operators, Marriott, Accor, and InterContinental Hotels Group, in the upper upscale, upscale, upper-midscale, and midscale segments.

The company either owns or leases hotel assets and engage global hospitality companies to operate, maintain and market its hotel assets under management contracts.

Brigade Hotel said it plans to use a significant portion of its IPO proceeds — INR 4.8 billion (about $57 million) — to repay a substantial chunk of its existing debt.

Specifically, the company intends to allocate INR 4.1 billion ($49 million) for its own debt reduction and INR 690 million ($8 million) to address outstanding borrowings of its material subsidiary, together addressing over 79% of its consolidated debt.

The company plans to restructure its finances across fiscal 2025 and 2026 to reduce interest burdens and boost cash flow flexibility.

The remainder of the funds will fuel Brigade’s ambitious expansion plans, including the development of five new hotels in high-growth regions across India. The company aims to broaden its footprint by focusing on prime markets in South India and tapping into emerging opportunities in tourism hotspots like Goa and popular pilgrimage destinations. In 2022, the number of domestic tourists who visited Indian pilgrimage sites was more than India’s population — 1.43 billion. 

The company will also reserve a portion of the funds for potential acquisitions.

The company plans to expand its footprint with a series of high-profile properties across Southern India, catering to a range of