Brigade Hotel Ventures IPO to open on July 24, offer size reduced to Rs 759.6 crore

Bengaluru, July 19, 2025 — Brigade Hotel Ventures Ltd (BHVL), the hospitality arm of Bengaluru-based real estate major Brigade Enterprises, is set to launch its much-awaited Initial Public Offering (IPO) on July 24, 2025. The company, which owns and operates several premium hotels under international brands such as Sheraton and Holiday Inn, has revised its offer size to ₹759.6 crore, a reduction from the earlier proposed ₹900 crore.

The public issue will close on July 26, with the price band expected to be announced early next week. This IPO marks a significant development in India’s resurging hospitality sector, which is recovering rapidly from the post-pandemic slump.

IPO Structure and Use of Proceeds

The revised IPO size comprises a fresh issue of shares worth ₹550 crore and an offer-for-sale (OFS) of shares worth ₹209.6 crore by existing shareholders. According to the company's red herring prospectus, the fresh capital will be primarily used to repay existing borrowings, fund expansion plans for new hotel properties, and improve infrastructure across its current portfolio.

“Deleveraging is a key strategic objective,” a company spokesperson told reporters. “We are also eyeing growth in Tier-2 cities and plan to diversify into mid-market hospitality formats to capitalize on rising domestic tourism.”

Why the Cut in Offer Size?

Market experts say the reduced offer size reflects a calibrated move to align with current investor sentiment and market dynamics.

Ruchir Shah, Senior Analyst at Anand Rathi Securities, said, “The hospitality IPO space has seen strong investor interest recently, but there's also a note of caution due to interest rate concerns and global volatility. By scaling down the issue size, BHVL is sending a signal that it is focused on long-term stability rather than aggressive fundraising.”

This also aligns with the company’s lean capex strategy. “They’re not looking to burn capital just to raise a bigger number on the balance sheet,” he added.

Financial Performance and Market Position

Brigade Hotel Ventures has reported a steady financial recovery since FY22. As per the draft prospectus:

• Revenue from operations for FY24 stood at ₹604 crore, a 29% YoY growth.

• EBITDA margins improved to 31.2%, driven by better room occupancy and higher Average Daily Rates (ADR).

• Net profit for FY24 was reported at ₹78 crore, up from ₹24 crore in FY23.

The company currently operates seven hotels across major cities like Bengaluru, Chennai, and Kochi, with over 1,300 keys. Strategic partnerships with global brands such as Accor, InterContinental Hotels Group (IHG), and Marriott International bolster its premium positioning.

Hospitality Sector Outlook

India’s hospitality sector is riding a multi-year uptrend, supported by growth in domestic tourism, business travel, and increased spending on leisure experiences.

According to HVS Anarock, the Indian hotel industry is projected to grow at a CAGR of 8.5% from 2024 to 2029. Occupancy levels in major metros are now approaching pre-COVID levels, with Average Room Rates (ARRs) witnessing double-digit YoY growth.

Namrata Desai, a sectoral analyst with Motilal Oswal, commented, “Investors should view BHVL as a proxy for India’s hospitality revival. With its strong parentage and strategic alliances, it offers a rare play on both premium and emerging mid-market segments.”

Risks and Considerations

Despite positive tailwinds, risks persist. The hospitality industry remains sensitive to macroeconomic factors such as inflation, interest rate hikes, and geopolitical tensions.

Another concern is capital efficiency. While BHVL has shown strong recovery, its return on capital employed (ROCE) at around 10.5% still lags peers in asset-light hospitality models like Lemon Tree or Chalet Hotels.

Investors will also keep an eye on Brigade Enterprises’ stake post-IPO and the management’s ability to maintain operational autonomy for BHVL.

Investor Outlook: What Should You Know?

Brigade Hotel Ventures’ IPO comes at a time when investor appetite for consumer-facing businesses is strong, especially those showing resilience post-pandemic. The company’s emphasis on deleveraging, brand partnerships, and diversified expansion makes it an attractive, albeit cautiously optimistic, proposition.

Retail and institutional investors alike are expected to show healthy interest. Anchor investors’ participation, set to be finalized on July 23, will be a key early indicator of confidence.