Brigade Hotel Ventures Limited (BHVL), the hospitality division of Brigade Enterprises, has announced its intention to launch an initial public offering (IPO) aimed at raising INR 900 crore. This marks the company’s entry into public markets, providing investors with an opportunity to engage with India’s rapidly recovering hospitality sector. The IPO is scheduled to open on July 21, 2025, and close on July 23, 2025.
The Indian hospitality sector is witnessing a significant revival following the pandemic. According to HVS Anarock, the market is projected to grow at a compound annual growth rate (CAGR) of 9–11% until fiscal year 2029, reaching a value of INR 1.42 lakh crore in fiscal year 2024. This growth is driven by factors including increased domestic travel, tourism reforms, urbanization, and India’s role as a host for global events.
Company Overview and Market Position
Brigade Hotel Ventures focuses primarily on the midscale to upper-upscale segments of the hospitality market, which are expected to flourish due to rising consumer affluence and shifting travel trends. As of June 30, 2024, BHVL operates nine hotels with a total of 1,604 keys across key urban centres such as Bengaluru, Chennai, Kochi, Mysuru, and GIFT City. The company partners with globally recognized brands such as Marriott, Accor, and IHG to enhance its operational management.
The company has adopted an “own-and-outsource” model, where it retains ownership of its assets while outsourcing operational management to established hotel brands. This strategy not only mitigates operational risks but also allows BHVL to leverage the brand equity of its partners.
The hospitality market in South India is particularly promising, contributing over 30% of India’s premium hotel supply. Cities like Bengaluru and Chennai have shown strong post-pandemic recovery, with occupancy rates of 72% and 70%, respectively.
Financial Performance and Future Prospects
In fiscal year 2024, Brigade Hotel Ventures reported a revenue of INR 401.7 crore, marking a year-on-year increase of 14.7%. The company’s EBITDA margin stood at 35.72%, a notable improvement from 3.46% in fiscal year 2022. This turnaround is attributed to better asset utilization and reduced operational overheads. The net profit reached INR 31.2 crore, compared to a loss of INR 82.2 crore in the previous fiscal year.
The company’s expansion strategy includes developing five new hotels, including a Grand Hyatt in Chennai and wellness-focused properties in Kerala. This expansion is expected to increase total inventory to over 2,300 keys by fiscal year 2027, positioning BHVL to capitalize on the growing hospitality demand in under-penetrated regions.
In a competitive landscape, BHVL’s strategic partnerships and operational model provide it with a unique edge. The company’s focus on the mid-to-upper upscale market segments allows for higher margins, estimated between 30% to 40%.
The IPO proceeds will be utilized for various purposes, including debt repayment of INR 481 crore and acquiring land from Brigade Enterprises for INR 107.52 crore. Additionally, funds will support inorganic growth and general corporate purposes.
Despite its promising outlook, Brigade Hotel Ventures faces challenges. The hospitality sector remains cyclical, and the company’s capital-intensive asset model could pose risks. Nevertheless, its integration with Brigade Enterprises provides significant advantages in land acquisition and project management, enhancing overall capital efficiency.
In summary, Brigade Hotel Ventures is poised for growth, supported by a solid operational foundation and strategic market positioning. As it prepares for its IPO, investors are likely to keep a close eye on the company’s performance and the broader trends within India’s hospitality sector.
