Brigade Hotel makes weak market debut, shares list 10% below IPO price

Brigade Hotel Ventures, a subsidiary of Brigade Enterprises Ltd (BEL) , made a weak debut on the domestic bourses on Thursday, listing at a 10% discount to the initial public offering (IPO) price, in sync with bearish broader market.

Shares of Brigade Hotel debuted at ₹82 on the BSE, a discount of 8.9% against the issue price of ₹90, with a market capitalisation of ₹3,114.71 crore. On the NSE, the hotel stock opened at ₹81.10, down 9.89% from the issue price. Meanwhile, the BSE Sensex and NSE Nifty were trading lower by 0.5% each after U.S. President Donald Trump imposed a 25% tariff and penalty on Indian exports.

Post-listing, Brigade Hotel shares recovered slightly and were trading at ₹84.65 on the BSE, down 5.95% from the IPO price. The stock hit an intraday high of ₹86.53 and a low of ₹81.49, with more than 9.6 lakh shares changing hands on the exchange.

Listing below Street expectations

The listing of Brigade Hotel fell short of Street expectations, as the stock was trading flat in the grey market.

“The lack of a listing premium despite initial GMP optimism reflects mixed confidence in short‑term growth and sector headwinds,” said Shivani Nyati, Head of Wealth at Swastika Investmart Ltd.

However, the company’s strategic parentage, asset footprint, occupancy strengths, and hotel partnerships could support medium‑ to long‑term value appreciation. “High risk Investors are recommended to hold the issue for medium to long term,” Nyati said.

Brigade Hotel IPO subscribed 4.76x

The ₹759.60-crore IPO of Brigade Hotel, which opened between July 24 and July 28, was subscribed 4.76 times. The offer, which was entirely a fresh issue of equity shares, was subscribed 6.83 times in the retail category, 5.74 times in the qualified institutional buyer segment, while the quota reserved for the non-institutional investor was booked 2.03 times.

The Bengaluru-based company intends to use IPO proceeds for debt repayment, land acquisition, and business expansion. The company will use ₹481 crore to repay debt, while ₹107.5 crore will be utilised for acquiring the undivided share of land from its promoter, Brigade Enterprises. The remaining funds will be used for inorganic growth opportunities and other general corporate purposes.

Ahead of the IPO, Brigade Hotel raised ₹325 crore from 17 anchor investors. The company, engaged in hotel ownership and real estate development across South India, allotted 3.6 crore equity shares to anchor investors at ₹90 per equity share, with a face value of ₹10 each.

Out of the total allocation, 2.55 crore equity shares, or 70.64%, of the anchor book, were allocated to 6 domestic mutual funds through a total of 12 schemes. The anchor book saw participation from a wide variety of marquee investors, including SBI Mutual Fund, Franklin India Mutual Fund, 360 One Mutual Fund, Axis Mutual Fund, Motilal Oswal Mutual Fund, Bandhan Mutual Fund, Edelweiss Mutual Fund,  Nuvama Mutual Fund, and others.

Brigade Enterprises forayed into the hotel business in 2004. Currently, it has a portfolio of nine operating hotels across Bengaluru, Chennai, Kochi, Mysuru, and GIFT City, with a total of 1,604 keys. These hotels are operated by major hotel brands like Marriott, Accor, and InterContinental Hotels Group.

The company is looking to expand its hospitality portfolio, solidifying its position as a leading hotel owner and developer in South India. The hospitality giant, which operates several brands, including Four Points by Sheraton, Grand Mercure, Holiday Inn, and Ibis Styles, plans to invest in new hotel developments to close the gap with rivals amid a booming domestic travel market. The company aims to increase its inventory to 2,600 keys by the financial year 2028-29.

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