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IPO Details
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IPO Timeline
Issue Highlights
Initial public offer of up to [] equity shares of face value of Rs.10 each (equity shares) of Brigade Hotel Ventures Limited (company or issue) for cash at a price of Rs.[] per equity share (including a share premium of Rs.[] per equity share) (issue price) aggregating up to Rs.900.00 crores (the issue) comprising a fresh issue of up to [] equity shares aggregating up to Rs.900.00 crores (the fresh issue). This issue includes a reservation of up to [] equity shares of face value of Rs.10 each (constituting []% of the post issue paid up equity share capital of the company) aggregating up to Rs.[] crores for subscription by eligible employees (the employee reservation portion) and a reservation of up to [] equity shares of face value of Rs.10 each (constituting []% of the post issue paid up equity share capital of the company) aggregating up to Rs.[] crores, for subscription by bel shareholders (as defined hereinafter) (the BEL shareholders reservation portion). The issue less the employee reservation portion and the bel shareholders reservation portion is hereinafter referred to as the net issue. The issue and the net issue will constitute []% and []% of the post-issue paid-up equity share capital, respectively. The company, in consultation with the book running lead managers, may consider a pre-ipo placement aggregating up to Rs.180.00 crores, prior to filing of the red herring prospectus. the pre-ipo placement, if undertaken, will be at a price to be decided by the company, in consultation with the book running lead managers. if the pre-ipo placement is completed, the amount raised pursuant to the pre-ipo placement will be reduced from the issue, subject to compliance with rule 19(2)(b) of the scrr. the pre-ipo placement, if undertaken, shall not exceed 20% of the size of the issue. the utilisation of the proceeds raised pursuant to the pre-ipo placement will be done towards the proposed objects of the issue in compliance with applicable law. prior to the completion of the issue and the allotment pursuant to the pre-ipo placement, the company shall appropriately intimate the subscribers to the pre-ipo placement, that there is no guarantee that the company may proceed with the issue or the issue may be successful and will result into listing of the equity shares on the stock exchanges. further, relevant disclosures in relation to such intimation to the subscribers to the pre-ipo placement (if undertaken) shall be appropriately made in the relevant sections of the red herring prospectus and prospectus. The face value of equity shares is Rs.10 each. the issue price is [*] times the face value of the equity shares. the price band and the minimum bid lot shall be decided by the company in consultation with the brlms.
Book Running Lead Managers
- JM Financial Limited
- ICICI Securities Limited
About Brigade Hotel Ventures
Brigade Hotel Ventures Limited (BHVL) is a subsidiary of Brigade Enterprises Limited, incorporated on August 24, 2016. The company owns and develops hotels in important cities of India, mostly in South India. The Company has nine hotels as of the date of the Draft Red Herring Prospectus, all in execution in upper upscale, upscale, upper-midscale and mid scale segment. Its hotels are part of global hospitality chains such as Marriott, Accor and InterContinental Hotels Group.
Brigade Hotel Ventures Business Model
- Rented room revenue: Income derived from the rental of hotel rooms
- Food and beverage (F&B) revenue: Revenue from the hotels' restaurants, bars, and other F&B services
- Additional operating revenue: Earnings from services other than rooms offered through the hotels, such as spa and laundry.
Brigade Hotel Ventures Growth Trajectory
Turnaround both in revenue and profit (An after fact-analysis of Brigade Hotel Ventures Limited:
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Growth in Revenue from Operations: The company has been generating significant growth, with the revenue from operations growing by 139.09% between FY22 and FY23 and further by 14.70% between FY23 and FY244.
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Profit After Tax: Following a loss in Fiscal 2022, it turned profitable in Fiscal 2023 and recorded incremental profit in Fiscal 2024.1 Profit after tax for the fiscal ended at ₹ 311.40 million.
Reason for Growth: The company pointed out that "better revenue, lower total expenses and lower tax expenses" led to the shift towards profitability and profit growth.
Key Points about Brigade Hotel Ventures
Objectives of the IPO
- Use of Net Proceeds Repayment or prepayment of borrowings: The Company intends to use the net proceeds for repayment or prepayment of its debt and that of its material subsidiary, SRP Prosperita Hotel Ventures Limited.
- Funding inorganic growth: Part of the proceeds will be used to finance potential acquisition and other strategic initiatives that could enhance future growth.
- General corporate purposes: The balance will be used for general corporate purposes, which might include working capital needs and other general and administrative expenses.
Potential Benefits for Investors
Potential benefits for investors are not expressly described in the sources. But investors are allowed to take part in an IPO which gives them the ability to:
- Investors get to be a part of a Company Which is in Growing Phase: Brigade Hotel Ventures Limited going forward open a new hotels portfolio which can provide growth and earning abilities.
- Exposure to Indian hospitality industry: One can get exposure to the Indian hospitality sector by investing in IPO of the same as the sector is likely to grow over a period of time.
- There is potential capital appreciation: If the company succeeds in producing a positive performance in the eyes of investors, the value of their shares can also appreciate.
Key Financials
| Particulars | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|
Revenue from operations (₹ in million) | 4017 | 3502 | 1464.80 |
Total Equity and liabilities (₹ in million) | 8867.80 | 8406.70 | 8690.90 |
Return on Net Worth (%) | 53.01% | 9.14% | 259.80% |
All Financial Information about Brigade Hotel Ventures Ltd
Comprehensive financial data, including revenue, profit/loss statements, EBITDA, and other critical metrics.
Particulars (in Rs. million)
Particulars (in Rs. million)
Peers Comparison:
| Particulars | Face Value (₹) | EPS (Basic) (₹) | P/E | RoNW (%) | NAV per Equity Share (₹) |
|---|---|---|---|---|---|
Our Company | 10 | 0.88 | [●] | 53.01% | 2.09 |
The Indian Hotels Company Limited | 1 | 8.86 | 77.51 | 13.13% | 71.16 |
EIH Limited | 2 | 10.22 | 39.04 | 16.58% | 65.34 |
Lemon Tree Hotels Limited | 10 | 1.88 | 65.56 | 11.75% | 19.52 |
Chalet Hotels Limited | 10 | 13.54 | 64.56 | 15.03% | 84.86 |
Juniper Hotels Limited | 10 | 1.46 | 259.73 | 0.90% | 119.34 |
Notes:
- The financial information for listed industry peers is consolidated and based on their annual reports for the year ending March 31, 2024.
- P/E ratio is computed based on the closing market price of equity shares on BSE on October 18, 2024, divided by the Diluted EPS for the year ended March 31, 2024.1
- P/E ratio is calculated based on the closing market price of equity shares on BSE (on October 18, 2024)2 divided by Diluted EPS for the year ended March 31, 20241
- NM: Not Meaningful due to negative earnings
Brigade Hotel Ventures IPO Strengths
Wider Brand Associations
The Brigade Hotel Ventures Limited has hotels under global brands such as Marriott, Accor and InterContinental Hotels Group. Linking with well-known names helps to draw in customers and increase the company profile among other hospitality providers.
Distribution of valuable Locations
The forthcoming 19 hotels that the company would be operating in South India shall be targeted at prime demand driven markets with higher potential growth opportunities in this region, reinforcing the companies plan. Such strategic destinations fill up occupancy and generate revenues.
Asset-Light Model Focus
Brigade Hotel Ventures operates on an asset-light model whereby it owns and develops the hotel realty and ties up with established operators for day-to-day operations. A capital-efficient strategy minimizes operational complexities to concentrate on expanding the portfolio, called an asset-light strategy.
Brigade Hotel Ventures IPO Risk Factors
- A significant portion of their revenues is derived from four hotels located in Bengaluru (Karnataka) (62.91% of revenue from operations in FY2024 was from our hotels located in Bengaluru (Karnataka). Any adverse developments affecting such hotels or locations could have an adverse effect on their business, financial condition, cash flows and results of operations.
- The company and their subsidiary, SRP Prosperita Hotel Ventures Limited have incurred losses in the past. In the event they incur net loss in the future, their business may be affected.
- They derive a significant portion of their revenues from their hotels Sheraton Grand Bangalore at Brigade Gateway, Holiday Inn Chennai OMR IT Expressway and Holiday Inn Bengaluru Racecourse (61.71% of the revenue from operations was from these hotels in Fiscal 2024). Any adverse developments affecting these hotels could hurt their business.
Key Strategies
- Expand Operations by Developing New Hotels at Select Locations
- Focus on Improving Operating Efficiencies and Increase Revenues
- Expand Portfolio by Way of Opportunistic and Accretive Acquisitions
