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IPO Details:

• IPO Opening Date: Thursday, July 24, 2025
• IPO Closing Date: Monday, July 28, 2025
• Issue Size: ₹759.60 crore
• Sale Type: Entirely a fresh issue of 8.44 crore shares, with no Offer for Sale (OFS)
• IPO Price Band: ₹85 to ₹90 per share
• Lot Size: 166 shares, with a minimum investment of ₹14,940 for retail investors
• Allocation to Investors:
  • QIBs: Not more than 75%
  • HNIs (NII): Not less than 15%
  • Retail Investors (RII): Not less than 10%
  • Employees: Reserved shares worth ₹7.60 crore with a ₹3.00 per share discount
  • BEL Shareholders: Reserved shares worth ₹30.38 crore (3,375,555 shares, 4%)
  • Anchor Investors: ₹324.73 crore
• Lead Managers: JM Financial Ltd. and ICICI Securities Ltd.
• Registrar: KFin Technologies Ltd.

About the Company:

• History: Brigade Hotel Ventures Ltd. (BHVL) was incorporated on August 24, 2016. Its promoter, Brigade Enterprises Limited (BEL), entered the hospitality business in 2004, with its first hotel, Grand Mercure Bangalore, commencing operations in 2009.
• Main products/services: BHVL is an owner and developer of hotels, providing a 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.
• Sales & manufacturing units: It has a portfolio of nine operating hotels with 1,604 keys across Bengaluru, Chennai, Kochi, Mysuru, and GIFT City, Gujarat. It is the second largest owner of chain-affiliated hotels and hotel rooms in South India among major private hotel asset owners as of March 31, 2025. Four of its hotels are on owned land parcels, and five are on leased premises.
• Employees: 1191 employees.
• Promoters: Brigade Enterprises Limited (BEL) is the promoter. BEL holds 95.26% of the pre-Issue paid-up equity capital.
• Branches/network: Primarily focused on the Southern region of India. Its hotels operate in the upper upscale, upscale, upper-midscale, and midscale segments and are operated by global hospitality companies like Marriott, Accor, and InterContinental Hotels Group.

3) Financials:

Post IPO Market cap: ₹3418.47 crore Market cap/ sales (FY25): 7.26x; P/E FY24: 109.76 times; P/E FY25 (annualized): 145.61 times

Observation on results: The company turned profitable from FY24 after previous losses. Revenue and EBITDA have shown consistent growth over the last three fiscals.

Anchor Investor Details

Brigade Hotel Ventures raised ₹325 crore from 17 anchor investors. The anchor allocation included 3.6 crore equity shares at ₹90 per share, with 70.6% of the anchor investment (₹229.4 crore) coming from domestic mutual funds.

Top 10 Anchor Investors with Allocation:
SBI Mutual Fund, Franklin India Mutual Fund, 360 ONE Special Opportunities Fund, Axis Mutual Fund, Motilal Oswal Asset Management, Bandhan Mutual Fund, Edelweiss Mutual Fund and Trusteeship, Nuvama Mutual Fund, and Edelweiss Life Insurance participated as key anchor investors.

The remaining anchor investors included other institutional participants across 12 schemes managed by six fund houses. Total allocation to mutual funds was 70.6% of the anchor portio

Salient points:

• Use of funds: Net proceeds from the fresh issue (₹759.60 crore) will be primarily used for repayment/pre-payment of ₹468.14 crore in borrowings, and ₹107.52 crore for buying land from the promoter BEL. The remainder is for general corporate purposes and unidentified inorganic growth acquisitions.
• Business scenario: The Indian hospitality industry is projected to see strong demand growth, with Bengaluru, Chennai, and Hyderabad expecting demand CAGRs of 10.1%, 4.9%, and 8.3% respectively from Fiscal 2025 to Fiscal 2030.
• Business operations: The company’s hotels are operated under management contracts with global hospitality companies in upper upscale, upscale, upper-midscale, and midscale segments, offering a comprehensive customer experience including F&B and MICE facilities.
• Revenue Model: Properties are owned or leased, and global hospitality companies manage and market them, with F&B services contributing approximately 33% to total revenues in FY25.
• Business strategy: The company aims to expand its portfolio by developing new hotels in high-growth regions, leveraging asset-light management contracts, and focusing on operational efficiencies and cost control. Becoming nearly net debt-free post-IPO is a key differentiating factor.
• Risks: Significant risks include carried forward losses (₹196.05 crore as of March 31, 2025) leading to negative reserves and surplus, high pre-IPO debt levels, geographical concentration of revenue in Bengaluru (63% in FY25), and potential delays in new project completion.
• Litigations: Contingent liabilities as of March 31, 2025, include income tax demands and substantial property tax demands under litigation.
• Revenue split by region (FY25): Bengaluru accounted for 62% of revenue, Chennai (Tamil Nadu) 13.83%, Kochi (Kerala) 9.18%, and Ahmedabad (Gujarat) 5.24%.
• Revenue split by product or service (FY25): Hospitality services generated ₹4600.70 million, leasing income ₹64.30 million, and other ancillary services ₹17.50 million.
• Capacity utilisation: Average occupancy in Fiscal 2025 was 76.76%, which was higher than the industry annual occupancy of 64.5%.
• Expansion: Plans to develop five additional hotels, projected to increase total keys from 1,604 to 2,560 by FY29.
• Working capital & inventory days: Average Days Inventory Outstanding was 55 days in FY25.
• CAGR profits/Margins last 3 years (FY23-FY25): Revenue CAGR 15.6%, EBITDA CAGR 30.0%, and PAT CAGR 73.2%.

5) Peers: (Data as of July 22, 2025, from RHP and other sources)

6) Management commentary: The management attributes FY23 losses to one-time accounting adjustments and the lower FY25 net profit to deferred tax adjustments, asserting profitability across all three fiscals otherwise. They express confidence in future trends, citing reduced finance costs from debt repayment and new hotel revenues, underpinned by a cost-efficient hospitality model.

7) Opinion: I intend to apply to the IPO in moderation. Long term prospects look OK but in shiortterm Listing gains cannot be be for sure. Too many issues may also dilute the listing. Post IPO equity capital: ₹379.83 crore; P/E for FY24: 109.76 times P/E FY25 (annualized): 145.61 times

Investment thesis Including Negatives:

• Ongoing expansions and bright prospects.
• The issue appears aggressively priced based on recent financials but looks OK for long-term value given the company’s/ sectors future prospects. Listing gains are not for sure. Debt Levels are high.
• The company achieved profitable operations from FY24.
• Significant debt repayment from IPO proceeds is expected to substantially reduce the debt-to-equity ratio and boost profitability by cutting annual interest costs.
• Achieving a nearly net debt-free status is a key positive differentiator compared to highly leveraged mid-sized hotel chains.
• The company has strong brand partnerships with real estate development expertise, which positions it well tn growing premium and business hotel demand.
• GMP (Grey Market Premium): ₹3 per share

• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.