Brigade Hotel Ventures (BHVL) is the owner and developer of hotels in key cities in India, primarily across South India. The company owns chain-affiliated hotels and rooms in South India (comprising the states of Kerala, Andhra Pradesh, Tamil Nadu, Karnataka, Telangana, and the Union territories Lakshadweep, Andaman and Nicobar Islands and Pondicherry) among major private hotel asset owners (i.e., owning at least 500 rooms pan India) as of March 31, 2025.

The hotels provide comprehensive customer experience, including fine dining and specialty restaurants, venues for meetings, incentives, conferences, and exhibitions (MICE), lounges, swimming pools, outdoor spaces, spas, and gymnasiums.

The company has a portfolio of nine operating hotels across Bengaluru (Karnataka), Chennai (Tamil Nadu), Kochi (Kerala), Mysuru (Karnataka) and the GIFT City (Gujarat) with 1,604 keys. The company‘s hotels are operated by global marquee hospitality companies such as Marriott, Accor and InterContinental Hotels Group.

BHVL is the wholly owned subsidiary of Brigade Enterprises (BEL), which is one of the leading real estate developers in India. BEL is a multi-asset class real estate developer with projects across real estate, leasing, and hospitality businesses. The real estate business, from January 2021 to June 30, 2024, has completed 33 projects with an aggregate developable area of 17.49 million square feet and 11.79 million square feet of aggregate saleable area.

BHVL intends to develop a luxury beach resort at ECR in Chennai (Tamil Nadu) and two upper midscale hotels in Bengaluru (Karnataka). With respect to the luxury beach resort, the company has entered into a management agreement with Hyatt to develop the resort under the Grand Hyatt brand. Similarly, with respect to the two upper midscale hotels in Bengaluru, ithas entered into definitive agreements with Marriott to develop these hotels under the Fairfield by Marriott brand. BHVL also intends to develop a luxury hotel under the InterContinentalbrand in Hyderabad, for which its promoter, BEL, has entered into a definitive agreement with InterContinental Hotels Group. In addition, the company plans to develop a wellness resort on 14.70 acres in Vaikom, Kerala of which the company owns 7.08 acres and has entered into a memorandum of agreement dated October 21, 2024, with Brigade Hospitality Services Limited to purchase the balance 7.62 acres. BHVL has also entered into a definitive agreement with Marriott to develop this resort under The Ritz-Carlton brand. BHVL intends to complete the construction of the luxury beach resort in Chennai and two upper midscale hotels in Bengaluru by Fiscal 2028 and the remaining two hotels (including the wellness resort) by Fiscal 2029.

Object of the offer

The IPO consists of a fresh issue of Rs 759.6 crore.

Out of the proceeds from the fresh issue, Rs 468.14 crore will be used for repayment/ prepayment/ redemption, in full or in part, of certain borrowings availed of by the company and its material subsidiary SRP Prosperita Hotel Ventures Limited, Rs 107.52 will be used towards payment of consideration for buying of undivided share of land from promoters of the company (BEL) and the balance towards general corporate purpose.

On 03 July 2025, the company made a pre-IPO placement of 14000000 equity shares of Rs 10 face value at Rs 90 per share(Rs 80 per share premium) aggregating Rs 126 crore.The pre-IPO placement allotees were nominees of 360 ONE Alternates Asset Management Limited, a Category II AIF.

Strengths

BHVL assets are strategically located award winning hotels with diversified offerings in key cities. It has a portfolio of nine operating hotels across Bengaluru, Chennai, Kochi, Mysuru, and the GIFT City with 1,604 keys.

BHVL focuses on asset management resulting in operating efficiencies. BHVL has a business model where it either owns or leases hotel assets and engages global hospitality companies to operate, maintain and market its hotel assets under management contracts. This approach helps it attract a global clientele, efficiently manage day-to-day operations, and attract top talent. Additionally, BHVL monitors and exercises regular oversight to optimize the performance of its hotels. It engages each hotel’s operator management team to discuss and agree upon budgeting, cost management, and operational and financial targets.

The company strives to enhance guest comfort and experience while staying mindful of depleting natural resources and ensuring minimal environmental impact. Its focus is long-term business sustainability and resilience. The company is dedicated to integrating energy-efficient technologies, renewable energy sources, and sustainable procurement methods. From eco-friendly amenities for enhanced guest experiences to active community engagement, each initiative reflects the company’s commitment to sustainability.

BHVL is the second largest owner of chain-affiliated hotels and rooms in South India. The company is a whollyowned subsidiary of BEL, which is one of the leading Indian real estate developers in India. Its association with BEL gives it a competitive edge and allows it to leverage its brand reputation, relationships with corporate clients, and expertise in developing real estate properties.

Weaknesses

The company has entered into hotel operator services agreements and other related agreements with Marriott, Accor and InterContinental Hotels Group to receive operating and marketing services for its hotels. If these agreements are terminated or not renewed, the operations of the company will be affected as 2 of the company’s hotels operated under Marriott brand contributed 43.8% of the total revenue in FY2025.

The hospitality industry is intensely competitive and the company’s inability to compete effectively may adversely affect its business.

The company derived around 32% of its revenues from food and beverages in FY2025 and if the company cannot maintain the quality and hygiene standards of the food and beverages that it offers, then the revenues of the company will be impacted.

The company has many personnel deployed across its hotels.Consequently, the company may be exposed to service-related claims and losses or employee disruptions that could have an adverse effect on its reputation. The attrition rate of the employees in FY 2025 was 58.19%.

Legal claims against the company and promoted stood at Rs 38.1 crore and Rs 219.8 crore, respectively, as on July 18,2025.

The company incurred losses at net levels in FY2023 of Rs 3.1 crore and might incur losses in the future which might affect the financial condition of the company.

The company operates in a capital-intensive industry. The company’s current and future levels of leverage could have significant consequences for the future financial results and business prospects. As of March 31, 2025, the company had outstanding borrowings of Rs 617.3 crore on a consolidated basis.

The company is exposed to risks associated with the construction of new hotels. The company is in the process of developing 5 new hotels. Delays in the construction of new hotels may have an adverse effect on the company’s growth prospectus.

The COVID-19 pandemic, or any future pandemic or widespread public health emergency, could affect the company’s business and financial condition.

Contingent liabilities as on 31 March 2025 stood at Rs 53.95 crore.

Valuation

For FY 2025, consolidated sales were up by 16.6% to Rs 468.25 croreprimarily due to increase in occupancy rate and average room rent.The occupancy and ARRof assets improved to 76.76% and Rs 6693.6 respectively in FY25 as against 73.29% and Rs 6387.6 in FY2024. OPM declined10bps to 35.2% which led to 16.2% increase in operating profit to Rs 164.44 crore. Other income declined 22.9% to Rs 2.43 crore while interest cost increased 5.3% to Rs 72.56 crore and depreciation inclined 14.1% to Rs 49.80 crore. PBT stood at Rs 44.51 crore as against PBT of Rs 32.08 crore in FY2024. Tax expenses stood at Rs 20.85crore in FY2025 as against Rs 0.94 crore in FY2024. PAT was lower by 24% year on year and stood at Rs 23.66 crore as against Rs 31.14 crore in FY2024.

On July 03,2025, the company allotted 14000000 equity shares to nominees of 360 ONE Alternates Asset Management Limited, a Category II AIF, at Rs 90 per equity share including Rs 80 premium per equity share.

At the higher price band of Rs 90, the offer is made at a P/E of 144.48times the FY2025 EPS (EPS of Rs 0.6) and around 21.69 times post-IPO EV/FY2025 EBITDA.

The total outstanding borrowings were Rs 617.3 crore on a consolidated basis as of 31 March 2025. The plan is to repay 75.8% of the debt using the issue proceeds. This will significantly reduce interest costs and boost profits. The FY2025 EPS would be Rs 1.4 if 75.8% of the interest cost is eliminated, assuming all other factors, including the tax rate, remain unchanged. The adjusted P/E ratio, at the upper price band, moderates to 64.3x.

Listed industry peers of the company are Indian Hotels, Chalet Hotels, EIH and ITC Hotels. In comparison Indian Hotels trades at 56.3 times its P/TTM EPS (Rs 13.74) and 37.57 times EV/TTM EBITDA, Chalet Hotels trades at 141.85 times its P/FY2025 EPS (Rs 6.5) and 30.5 times EV/FY2025 EBITDA, EIH trades at 31.98 times its P/FY2025 EPS (Rs 11.8) and 22.61 times EV/FY2025 EBITDA and ITC Hotels trades at 83.61 times its P/FY2025 EPS (Rs 3.05) and 42.57 times EV/FY2025 EBITDA.