Brigade Hotel Ventures Files Draft IPO Papers with SEBI to Raise Rs 900 Crore
Introduction
Brigade Hotel Ventures Ltd, a prominent owner and developer of hotels in South India, has recently filed draft papers with the Securities and Exchange Board of India (SEBI) to raise Rs 900 crore through an initial public offering (IPO). This IPO is poised to bring fresh capital to the company and propel its growth in the hospitality industry.
IPO Details
The proposed IPO solely consists of a fresh issue of equity shares, with no Offer-for-Sale (OFS) component, as stated in the draft red herring prospectus (DRHP). Approximately Rs 481 crore from the IPO proceeds would be utilized for debt repayment, while Rs 412 crore will be allocated to the company itself. Furthermore, Rs 69 crore has been earmarked for its material subsidiary, SRP Prosperita Hotel Ventures Ltd.
Additionally, Brigade Hotel Ventures plans to secure a Pre-IPO Placement to raise up to Rs 180 crore. If this placement is successfully executed, the final issue size will be lower than the initially projected amount.
Background and Portfolio
Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises Ltd (BEL), one of the esteemed real estate developers in India. BEL ventured into the hospitality business in 2004 and opened its first hotel, Grand Mercure Bangalore, in 2009. Presently, the company boasts a notable portfolio of nine operating hotels across major cities such as Bengaluru, Chennai, Kochi, Mysuru, and GIFT City, with a cumulative presence of 1,604 rooms.
To ensure unparalleled guest experiences, Brigade’s hotels are managed and operated by renowned international hospitality brands including Marriott, Accor, and InterContinental Hotels Group.
Utilization of Funds
Apart from the aforementioned debt payment and allocation to the company and its subsidiary, a part of the IPO proceeds, approximately Rs 107.52 crore, will be used to acquire an undivided share of land from the Promoter, BEL. The residual funds stemming from the IPO will support upcoming acquisitions, other strategic initiatives, and general corporate purposes.
Book-Running Lead Managers
The esteemed book-running lead managers appointed for this IPO journey are JM Financial and ICICI Securities. Their expertise in the capital markets will ensure a smooth and successful offering for Brigade Hotel Ventures Ltd.
Conclusion
Brigade Hotel Ventures’ filing of draft IPO papers with SEBI marks a significant step forward for the company and the hospitality sector as a whole. With the potential to raise Rs 900 crore, Brigade Hotel Ventures aims to strengthen its presence in South India’s hotel industry and deliver remarkable experiences to its patrons. As the IPO progresses, investors and stakeholders eagerly await further updates on the growth trajectory of Brigade Hotel Ventures Ltd.
