Bengaluru: Prestige Hospitality Ventures Ltd plans to launch its ₹2,700 crore maiden public offer in October, according to two people familiar with the matter, as it joins the league of hotel chains going public during a travel boom.
Prestige Hospitality’s initial public offering (IPO) will be the third public listing in the hospitality sector this year after Brookfield-backed Schloss Bangalore Ltd, the operator of ‘The Leela’ brand; and Brigade Hotel Ventures Ltd raised ₹3,500 crore and ₹746 crore, respectively. The Securities and Exchange Board of India (Sebi) approved Prestige Hospitality’s offer in August.
“The roadshows and marketing of the IPO have been going on,” said the first person quoted above on the condition of anonymity. “The UDRHP (updated draft red herring prospectus) will be filed soon. The company is aiming to launch the IPO next month.”
A Prestige spokesperson didn’t respond to emailed queries.
The IPO will comprise a fresh issue of shares worth ₹1,700 crore and an offer for sale (OFS) of ₹1,000 crore by parent Prestige Estates Projects Ltd. The proceeds from the fresh issue will be used for debt repayment, acquisitions, and general corporate purposes.
Industry recovery
“After struggling during the pandemic, the hotel industry’s performance has recovered quite strongly. IPOs have helped companies unlock value for promoters and investors who have come on board,” said Harmeet Bedi, senior vice-president, hotels and hospitality group, India at property consultant JLL.
“Companies have also utilized the IPO proceeds route to repay debt and raise growth capital,” he said. “It has given them surplus capital to buy land or operational assets.”
Prestige Hospitality Ventures is a wholly owned subsidiary of Bengaluru-headquartered Prestige Estates Projects. It owns and develops hotel assets, and operates the JW Marriott Prestige Golfshire and Conrad Bengaluru, among other properties.
Prestige has put its hotel business expansion plans on the fast track amid the country’s thriving hospitality and tourism market. The group had indicated last year that it plans to double its hospitality portfolio in three to four years.
“The performance of the hotel industry across India has been good this year despite the disruption in May, when several airports were closed,” said JLL’s Bedi. “Occupancy has grown, while average daily rate (ADR) has seen double-digit growth this year so far.”
The hospitality sector has seen multiple IPOs in the past two years: Samhi Hotels (September 2023), Juniper Hotels (February 2024), and Park Hotels (February 2024). Ventive Hospitality Ltd, a joint venture between real estate developer Panchshil Realty and global asset manager Blackstone, was listed in December. Most of these IPOs were by pedigreed promoters, with a good mix of operating hotels and a strong development pipeline.
India’s organized hotel industry is set to add more than 100,000 rooms to surpass the 300,000-mark by 2029, according to the India Hotel Market Review 2024 released in February by consultant Horwath HTL. For the first time, hotel chains crossed the 200,000 branded room mark, adding 14,000 rooms to India’s inventory in 2024.