Brigade Hotel Ventures Limited (BHVL), the hospitality division of Brigade Enterprises Limited, is set to enter public markets with its inaugural Initial Public Offering (IPO) on July 21, 2025. This move aims to provide investors with an opportunity to engage in India’s rapidly recovering hospitality sector, buoyed by a robust portfolio and strategic growth initiatives.
India’s hospitality industry is witnessing a significant resurgence following the pandemic, with a positive long-term outlook. According to HVS Anarock, the Indian hotel market is valued at approximately INR 1.42 lakh crore in the fiscal year 2024 and is anticipated to grow at a compound annual growth rate (CAGR) of 9–11% through fiscal year 2029. Factors driving this growth include an increase in domestic travel, reforms in tourism policies, urbanization, and the hosting of global events.
The fundamentals of the hospitality market reflect a strong recovery. Key indicators for the current fiscal year include an occupancy rate of approximately 64%, up from 54% in fiscal year 2022, an average daily rate (ADR) of INR 6,057 (a 21% year-on-year increase), and revenue per available room (RevPAR) at INR 3,877, marking a 24% rise compared to the previous year. This growth has led to a demand-supply imbalance that is enhancing profitability for hotel owners, including BHVL.
Focus on High-Growth Markets
BHVL is strategically targeting South India, particularly cities like Bengaluru, Chennai, Kochi, Mysuru, and GIFT City. This region is a significant contributor to India’s premium hotel supply, accounting for over 30% of the total. The area benefits from various factors such as IT-driven business travel, medical tourism, and cultural tourism. Notable occupancy rates in fiscal year 2024 include 72% in Bengaluru, 70% in Chennai, and 65% in Kochi.
The midscale to upper-upscale segments are leading the growth trajectory in the hospitality market, with margins ranging from 30% to 40%. This segment represents about 42% of India’s branded hotel inventory and is expected to see further development due to increasing disposable incomes and changing travel preferences.
Operational Strengths and Future Prospects
Brigade Hotel Ventures operates under a unique “own-and-outsource” model, retaining ownership of hotel assets while partnering with global hospitality brands like Marriott, Accor, and IHG. This strategy allows BHVL to leverage the operational expertise of established brands while capitalizing on its own real estate and development capabilities. As of June 30, 2024, BHVL has a portfolio of 9 hotels with 1,604 keys across key urban centers.
The company is poised for growth with five hotels currently under development, including a Grand Hyatt in Chennai and wellness-focused properties in Kerala, which are expected to increase its total inventory to over 2,300 keys by fiscal year 2027. This expansion aligns with the broader growth of India’s hospitality market, particularly in regions with high demand and limited supply.
Financially, BHVL has shown significant improvement, transitioning from a net loss of INR 82.2 crore in fiscal year 2022 to a net profit of INR 31.2 crore in fiscal year 2024. The EBITDA margin also reflects growth, climbing to 35.72% from just 3.46% two years prior.
The upcoming IPO aims to raise INR 900 crore, with proceeds allocated for debt repayment, land acquisition from Brigade Enterprises, and general corporate purposes. The IPO will also feature a retail quota of 10% and is expected to close on July 23, 2025.
As Brigade Hotel Ventures prepares for its market debut, it stands out as a promising player in the Indian hospitality landscape, backed by strong operational metrics, strategic partnerships, and a solid growth pipeline. While challenges remain, including dependence on macroeconomic conditions and competition within the industry, the company’s recent financial turnaround and expansion plans present a compelling opportunity for investors.
