Brigade Hotel Ventures IPO sails through on day 2; GMP takes a hit

The initial public offering (IPO) of Brigade Hotel Ventures continued to see a decent response during the second day of the bidding process from all the categories of the investors. The issue, which kicked off on Thursday, July 24, was overall booked 67 per cent on day one.

Bengaluru-based Brigade Hotel Ventures is selling its shares in the price band of Rs 85-90 apiece. Investors can apply for a minimum of 166 shares and its multiples thereafter. It is looking to raise Rs 759.60 crore via IPO, which is entirely a fresh share sale of 8,44,00,000 equity shares.

According to the data, the investors made bids for 5,67,20,706 equity shares, or 1.11 times, compared to the 5,11,93,987 equity shares offered for the subscription by 3.35 pm on Friday, July 22, 2025. The three day bidding for the issue shall conclude on Monday, July 28.

The allocation for retail investors was subscribed 4.38 times, while the portion reserved for non-institutional investors (NIIs) saw a subscription of 87 per cent. Portion for employees was booked 51 per cent. However, the quota set aside for qualified institutional bidders (QIBs) saw bids for only eight per cent as of the same time.

Brigade Hotel Ventures is the owner and developer of hotels in key cities in India, primarily across South India. It owns chain-affiliated hotels and rooms in South India among major private hotel asset owners, with at least 500 rooms pan India as of March 31, 2025. Its hotels are operated by global marquee hospitality players such as Marriott, Accor and InterContinental Hotels Group.

The grey market premium (GMP) of IndiQube Spaces has seen a sharp correction amid the rising volatility and muted bidding for the issue. Last heard, the company was commanding a premium of Rs 6-8 per share in the unofficial market, suggesting 7-9 per cent listing gains for the investors. The GMP stood around Rs 17, when the price band was announced.

Analysts mostly have a mixed view on this IPO. They suggest subscribing to this citing its recent profitable performance, strong parentage, hold in the southern India's market. However, mixed financials, rich valuations, concentration of revenue and high debt are the major concerns for the issue.

Brigade Hotels is demanding an EV/sales multiple of 7.3 times, this valuation seems to be in-line compared to its peer's average. Rising domestic travel, foreign tourist arrivals, and steady hotel inventory growth especially in Bengaluru, Chennai, and Hyderabad support the long-term growth narrative, said Choice Broking,

"The company’s focus on developing hotels in commercially and logistically strategic areas, combined with above average room inventories, positions it favorably to capture future demand. Key assets like Sheraton Grand Bangalore and Grand Mercure Ahmedabad further reinforce its potential for long-term value creation," it added with a 'subscribe for long term' rating.

Brigade Hotel Ventures reported a net profit of Rs 23.66 crore with a revenue of Rs 470.88 crore for the financial year 2024-25. The company clocked a net profit of Rs 31.14 crore with a revenue of Rs 404.85 crore for the year ended on March 31, 2024. The company shall command a market capitalization of Rs 3,418.4 crore.

The company's business model involves building the hotels and then handing it over to hospitality service companies for the operations and management. Its debt to equity on a post-issue basis comes out to 1.5 times vs listed peers' average of 0.7 times, said Indsec Research. "Overall, we feel the risk to reward ratio is high and thereby ascribe 'subscribe for long Term' rating," it said.

Brigade Hotel has reserved shares worth Rs 7.6 crore for its employee, who will get a discount of Rs 3 per share. Shareholders of Brigade Enterprises have a reservation of Rs 30.38 crore. Of the remaining net issue, 75 per cent shares are reserved for qualified institutional bidders (QIBs), while non-institutional investors and retailers will have 15 per cent and 10 per cent allocation, respectively.

Brigade Hotel Ventures raised Rs 324.7 crore from anchor investors as it allocated 3.6 crore equity shares at a price of Rs 90 apiece. JM Financial and ICICI Securities is the book-running lead manager of the Brigade Hotel Ventures IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE on Thursday, July 31.