Prestige Hospitality Ventures gets Sebi nod for ₹2,700 crore IPO

Prestige Hospitality Ventures Ltd, a wholly owned subsidiary of Prestige Estates Projects , has received a nod from the Securities and Exchange Board of India (Sebi) to raise up to ₹2,700 crore through the initial public offering (IPO) route. The Bengaluru-based hospitality asset owner and developer had filed its draft red herring prospectus (DRHP) with the capital market regulator in April this year.

As per the DRHP, the Prestige Hospitality IPO comprises a fresh issue of equity shares worth ₹1,700 crore and an offer for sale aggregating up to ₹1,000 crore, totaling ₹2,700 crore. Under the OFS, Prestige Estates Projects Limited, a promoter entity, will partially offload its stake.

The real estate company, owner of properties including JW Marriott Prestige Golfshire and Conrad Bengaluru, aims to use the fresh equity proceeds to restructure its finances and expand operations.

Out of the ₹1,700 crore, Prestige Hospitality will utilise ₹1,121.27 crore for loan repayment availed by the company and its material subsidiaries, namely Sai Chakra Hotels Private Limited and Northland Holding Company Private Limited. The company also proposes to utilise the funds for inorganic growth through unidentified acquisitions, other strategic initiatives, and general corporate purposes.

India's hospitality sector has witnessed a notable uptick in IPO activity over the past year, driven by renewed investor confidence in travel, tourism, and premium real estate. Recently, Brigade Hotel Ventures and Schloss Bangalore Limited, the owner of Leela Hotels, were listed on the domestic bourses, indicating growing optimism in India’s high-end and business hospitality segments, especially with increasing domestic travel, MICE demand, and inbound tourism.

Prestige Hospitality Ventures focusses on luxury, upper-upscale, and upper midscale hospitality assets in India, catering to both business and leisure travellers. The company is a part of the Prestige Group, whose promoter, Prestige Estates Projects Limited, has 38 years of experience in real estate development and had a market cap of ₹72,966 crore as of December 31, 2024.

As of December 31, 2024, Prestige Hospitality’s portfolio included seven operating hospitality assets with 1,445 keys, which comprise 1,255 operating keys and one hospitality asset currently under renovation with 190 keys. In addition, the portfolio includes three ongoing hospitality assets with 951 expected keys, covering 1.88 million sq. ft of developable area, and nine upcoming hospitality assets with 1,558 expected keys over 2.64 million sq. ft of developable area. The portfolio (comprising operating, ongoing, and upcoming hospitality assets) has the largest number of keys among the major private hotel asset owners or developers in south India, as per the DRHP.

The company increased its operating keys at a CAGR of 6.89% between FY22 and the nine months ended December 31, 2024. Its portfolio is spread across major metro cities and urban centres in India such as Bengaluru in Karnataka, Delhi-NCR, Mumbai in Maharashtra, Goa, Hyderabad in Telangana, and Chennai in Tamil Nadu.

The company has operating arrangements with various brands owned by Marriott International, including St. Regis, Edition Hotels, Resorts & Suites, W Hotels, JW Marriott Hotels & Suites, Marriott Marquis Hotels, Marriott Hotels, Sheraton Hotels & Resorts, Autograph Collection Hotels, Tribute Portfolio Hotels & Resorts, Moxy Hotels, Aloft Hotels, and Marriott Executive Apartments (under renovation), as well as other global brands such as Conrad by Hilton Worldwide and Angsana Resorts & Spa by Banyan Group. The company has the highest number of keys under operating and pipeline hospitality assets in the Marriott-managed portfolio, aggregating to 9% of Marriott’s managed portfolio.

On the financial front, revenue from the sale of hospitality services increased to ₹662.68 crore in the nine months ended December 31, 2024, from ₹560.34 crore in the nine months ended December 31, 2023. Further, revenue from the sale of hospitality services rose to ₹795.69 crore in FY24 from ₹636.17 crore in FY23 and ₹191.72 crore in FY22, reflecting a CAGR of 103.73% between FY22 and FY24.

JM Financial Limited, CLSA India Private Limited, J.P. Morgan India Private Limited, and Kotak Mahindra Capital Company Limited are the book-running lead managers to the issue.

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