Brigade Hotel Ventures IPO opens today: Should you subscribe?

Brigade Hotel Ventures (BHVL), a hospitality arm of real estate major Brigade Enterprises, will open its Rs 759.6 crore initial public offering (IPO) for subscription today. The public issue, which is entirely a fresh issue of 8.44 crore equity shares, is priced in the band of Rs 85–90 per share, and will close on July 28.

The tentative listing date is July 31 on both BSE and NSE. The IPO has a grey market premium (GMP) of around 9%.

Brigade Hotel owns and operates nine upscale hotels with 1,604 keys across South Indian cities such as Bengaluru, Chennai, Kochi, Mysuru, and GIFT City in Gujarat.

These are managed under global hospitality brands like Marriott, Accor, and IHG, with an average occupancy rate of 76.8% in FY25, significantly above the industry average of 64.5%.

The company plans to expand its portfolio to 14 hotels with 2,560 keys by FY29, including marquee additions like a Grand Hyatt in Chennai and a Ritz-Carlton wellness resort in Kerala.

Brigade Hotel has shown solid topline growth with revenues rising from Rs 350 crore in FY23 to Rs 468 crore in FY25. EBITDA margins remain strong at 35%, but net profit declined to Rs 23.7 crore in FY25 from Rs 31 crore in FY24, and return ratios remain modest.At the upper end of the price band, the issue is valued at a steep P/E of 125x and P/B of 32.3x, which is higher than peers like Lemon Tree Hotels or Indian Hotels Co.

Should You Subscribe?

Brokerages have taken a mixed but cautiously optimistic stance. Ventura Securities recommends a ‘Subscribe’, highlighting the company’s premium asset base, occupancy-led growth, and synergies from its parent Brigade Enterprises. Canara Bank Securities, however, flags concerns around the high valuations and recommends subscribing only for investors with a long-term horizon.

Given the premium brand affiliations, strategic expansion plans, and strong market positioning in South India, BHVL stands to benefit from India’s long-term hospitality upcycle. However, the IPO’s high valuation and modest profitability metrics warrant caution.

Investors looking for long-term participation in the premium hotel segment may consider subscribing, while those seeking short-term listing gains may find the 9% GMP underwhelming.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)