Brigade Hotel Ventures Limited (BHVL), the hospitality division of Brigade Enterprises, is set to launch its initial public offering (IPO) as it aims to capitalize on India’s revitalizing hospitality sector. The IPO, tentatively scheduled to open on July 21, 2025, offers investors a unique opportunity to gain exposure to a market experiencing significant growth following the pandemic.
The Indian hospitality sector has shown remarkable resilience, with a projected market size of INR 1.42 lakh crore for the fiscal year 2024. According to HVS Anarock, this market is expected to grow at a compound annual growth rate (CAGR) of 9–11% through fiscal year 2029. Factors such as increasing domestic travel, urbanization, and tourism reforms are driving this resurgence.
Market Dynamics and Company Positioning
The occupancy rate in India’s hotels reached approximately 64% in fiscal year 2024, a significant rise from 54% in fiscal year 2022. Average daily rates (ADR) also surged to INR 6,057, representing a year-on-year increase of 21%. Revenue per available room (RevPAR) also showed robust growth, climbing 24% year-on-year to INR 3,877. These metrics underscore a strong demand-supply imbalance that is enhancing profitability for hotel operators like Brigade Hotel Ventures.
Focusing primarily on South India, BHVL targets metropolitan areas such as Bengaluru, Chennai, Kochi, Mysuru, and the GIFT City. This region contributes over 30% of India’s premium hotel supply and benefits from a surge in business travel, medical tourism, and cultural tourism. For instance, Bengaluru reported a remarkable occupancy rate of 72% with an ADR of INR 6,620, while Chennai followed closely with 70% occupancy and INR 6,350 ADR.
BHVL’s Business Model and Financial Performance
Brigade Hotel Ventures operates as a wholly owned subsidiary of Brigade Enterprises, focusing on owning and developing premium hotel assets. Established in 2004, BHVL manages its properties through long-term agreements with global hospitality brands, including Marriott, Accor, and IHG. As of June 30, 2024, the company operates nine hotels with a total of 1,604 keys.
The company employs an “own-and-outsource” model, retaining ownership of its assets while leveraging the operational expertise of international brands. This approach not only enhances operational efficiency but also benefits from Brigade Group’s capabilities in land acquisition and project execution.
BHVL has a promising growth pipeline, with five hotels in development, including a Grand Hyatt in Chennai and wellness-focused properties in Kerala. These projects are expected to increase the company’s total inventory to over 2,300 keys by fiscal year 2027, positioning BHVL to take advantage of the burgeoning hospitality market in India.
Financially, BHVL reported a revenue of INR 401.7 crore for fiscal year 2024, marking a year-on-year increase of 14.7%. The EBITDA margin stood at 35.72%, a significant improvement from 3.46% in fiscal year 2022. The company also achieved a net profit of INR 31.2 crore, a turnaround from a loss of INR 82.2 crore in the previous fiscal year.
As part of its IPO strategy, BHVL plans to utilize proceeds for debt repayment, land purchases, and further expansion initiatives. The total fresh issue size is expected to be INR 900 crore, with the face value set at INR 10 per share.
The IPO will also allow BHVL to address high leverage, a concern that has been flagged pre-IPO but is being actively managed through the anticipated proceeds.
In conclusion, Brigade Hotel Ventures stands on the verge of a transformative phase, backed by a strong operational framework and a growing market. While challenges persist, such as high capital intensity and dependence on macroeconomic factors, the company’s upward trajectory and strategic partnerships provide a compelling case for potential investors.
