Prestige Hospitality IPO: Marriott Operator Files DRHP, Prestige Estates To Sell Rs 1,000-Crore Stake

Bengaluru-based Prestige Hospitality Ventures Ltd. filed draft papers for its initial public offering worth up to Rs 2,700 crore on Thursday.

The offer will be a combination of a fresh issue of up to Rs 1,700 crore, and an additional stake sale by promoter Prestige Estates Projects Ltd., according to the draft red herring prospectus.

The company may consider a pre-IPO placement of up to Rs 340 crore prior to filing the red herring prospectus with the Registrar of Companies, Prestige Hospitality said.

Of the Rs 1,700 crore the company plans on raising from the fresh issue, around Rs 1,120 crore are proposed to be used for repayment and prepayment of certain outstanding borrowings of the company and its units Sai Chakra Hotels Pvt. and Northland Holding Co. The remaining amount will be used for inorganic growth and general corporate purposes.

The funds from the offer for sale will go to Prestige Estates, which, at the time of filing the DRHP, held 100% stake in the company.

Upon debuting on the stock exchanges, Prestige Hospitality will compete against listed peers Chalet Hotels Ltd., Ventive Hospitality Ltd., Juniper Hotels Ltd., Indian Hotels Co., EIH Ltd. and ITC Hotels Ltd.

JM Financial Ltd., CLSA India Pvt., J.P. Morgan India Pvt. and Kotak Mahindra Capital Co. are the lead bankers for the deal.

Business

Prestige Hospitality is an asset owner and developer focused on luxury, upscale and upper midscale hospitality assets in India.

The company has operating arrangements with brands owned by Marriott International, including St. Regis, JW Marriott Hotels and Sheraton Hotels. It also operates hotels for other brands like Hilton Worldwide's Conrad and Banyan Group's Angsana Resorts.

As of December 2024, its portfolio included seven operating assets with 1,445 keys in Bengaluru. In addition, there are three ongoing assets with 951 expected keys coming up in Delhi and Bengaluru, and nine upcoming projects with 1,558 expected keys.

Prestige Hospitality 9MFY25 Highlights (YoY)

• Revenue rose 49% to Rs 996 crore from Rs 668 crore.

• Ebitda fell 1% to Rs 293 crore from Rs 295 crore.

• Ebitda margin fell to 29.4% from 44.3%.

• Net profit fell 18% to Rs 68 crore from Rs 82 crore.

For the nine months ended December 2024, Prestige Hospitality's bottom line and operating profit both fell on account of higher expenses, including contractor cost of Rs 137 crore. This was seven times higher than what it was during the nine month period in the previous fiscal.

Contractor cost primarily includes expenses incurred for third-party contractors involved in the construction projects.

The company has not paid dividends to its shareholders in the last three financial years.

For fiscal 2024, the Marriot-operator reported a revenue of Rs 993 crore, and a profit of Rs 239 crore. Operating income stood at Rs 478 crore and its margin against the top line came up to 48.1%.

As of December 2024, the company had a cash balance of Rs 140 crore, including bank balances.