Retail Research IPO Note

Sector: Hospitality Price Band (Rs): 85 – 90

Recommendation: SUBSCRIBE
22nd July 2025
for long term

Brigade Hotel Ventures Ltd.

Company Overview: Issue Details
Brigade Hotel Ventures Ltd. (BHVL) is a hotel chain primarily based in South India. Date of Opening 24th July 2025
The company is the second largest owner of chain-affiliated hotels and hotel rooms Date of Closing 28th July 2025
in South India. Brigade Hotels has a portfolio of 9 operational hotels across Price Band (Rs) 85 – 90
Bengaluru, Chennai, Kochi, Mysuru and the GIFT City in Gujarat. The company’s Issue Size (Rs cr) 760
hotels are operated by global marquee hospitality companies such as Marriott, Fresh Issue (Rs cr) 760
Accor, InterContinental Hotels Group, etc. Brigade has a strong parentage of No. of shares 8,93,64,706 - 8,44,00,000
Brigade Enterprises Ltd which is a real estate developer based out of Bengaluru. As Face Value (Rs) 10
of July 18, 2025, the total number of keys stands at 1,604. Post Issue Market Cap (Rs cr) 3,271 – 3,418
BRLMs JM Financial Ltd, ICICI Securities Ltd
Key Highlights: Registrar KFin Technologies Ltd.
1. Strong portfolio presence in Southern India: BHVL enjoys a strategic presence Bid Lot 166 shares and in multiple thereof
across top business and leisure destinations in Southern India such as Bengaluru,
QIB shares 75%
Chennai, Kochi and Mysuru. Company’s hotels are typically located in strong
Retail shares 10%
demand locations driven by factors such as population density, premium
NII shares 15%
neighborhoods, commercial centres, cultural heritage hubs and IT hubs. Hotels are
Employee Reservation (Rs cr) 7.6
operated by global marquee hospitality companies such as Marriott, Accor,
BEL Shareholders’
InterContinental Hotels Group in the upper upscale, upscale, upper-midscale and 30.4
Reservation (Rs cr)
midscale segments.

2. Comprehensive service ecosystem: The company provides a comprehensive Objects of Issue

customer experience including fine dining and specialty restaurants, venues for Estimated utilization
MICE, lounges, swimming pools, outdoor spaces, spas, and gymnasiums. Aggregate from net proceeds (Rs
MICE area stands at ~2.15 lakh sq. ft. across hotels. In addition, food and beverage cr)
(F&B) outlets and entertainment offerings within the hotels provide a diversified Repayment/pre-payment, in full or in part,
experience for customers. In FY25, revenue from F&B services contributed ~33% to of certain outstanding borrowings availed 468.0
total revenues. by the company and its subsidiaries
Payment of consideration for buying of
3. Efficient business model with strong parentage: Brigade Hotel operates on a Undivided Share of Land from our 108.0
business model where properties are either owned or leased and are operated, Promoter, BEL
maintained and marketed by global hospitability companies under management Pursuing inorganic growth through
contracts. This approach helps the company attract a global clientele, efficiently unidentified acquisitions and other strategic -
manage day-to-day operations, and attract top talent. The company plans to derive initiatives and general corporate purposes.*
operational efficiencies through optimizing space utilization, staffing, process and Total proceeds from fresh issue 760.0
leveraging technology. Brigade Hotel also derive benefits from promoter group *The amount utilised for general corporate purposes shall not exceed 25% of
Brigade Enterprises’ expertise to scout and develop hotel properties in areas with the Gross Proceeds.
potential demand traction.

4. Expansion plans: BHVL plans to expand its portfolio by adding 5 new hotels. In Shareholding Pattern
particular, it plans to develop a luxury beach resort in Chennai and two upper Pre-Issue No. of Shares %
midscale hotels in Bengaluru. Brigade has entered into a management agreement Promoter & Promoter Group 28,14,30,000 95.3
with Hyatt to develop the resort in Chennai under the ‘Grand Hyatt’ brand and with Public & Others 1,40,00,000 4.7
Mariott to develop the two hotels in Bengaluru under the ‘Fairfield by Marriott’ Total 29,54,30,000 100.0
brand. In addition, the company also intends to develop a luxury hotel under the
‘InterContinental’ brand in Hyderabad and a luxury wellness resort under ‘The Ritz-
Carlton’ brand in Vaikom, Kerala. New properties in Chennai and Bengaluru are Post Issue @Lower Price Band No. of Shares %
expected to be completed by FY28 and the remaining two hotels by FY29. With the Promoter & Promoter Group 28,14,30,000 73.1
additional developments, number of keys is expected to reach 2,560 by FY29 from
Public & Others 10,33,64,706 26.9
1,604 currently.
Total 38,47,94,706 100.0
Valuation: Brigade Hotel Ventures is one of the prominent hotel owner and
developer primarily operating in South India. The company has a strong financial
growth track record of 15.6%/30.0%/73.2% CAGR in Revenue/EBITDA/PAT over Post Issue @Upper Price Band No. of Shares %
FY23-25 respectively. However, the company has a negative Reserves & Surplus Promoter & Promoter Group 28,14,30,000 74.1
of Rs 196 cr as of Mar’25 due to accumulated losses in the past. Out of the total
IPO proceeds of Rs 760 cr, BHVL will utilize ~Rs 468 cr towards debt repayment Public & Others 9,84,00,000 25.9
which will lead to reduction in D/E to below 1.0x from 7.1x currently and Total 37,98,30,000 100.0
improvement in profitability as interest cost saving of ~Rs 45 cr will flow through
Source: RHP, SSL Research
the P&L. Going forward, trends in occupancy levels and ARR of the company will
be key monitorable. At the upper price band of Rs 90, BHVL is valued at FY25
EV/EBITDA of 19.8x We recommend to SUBSCRIBE to the issue at cut-off price for
long term.
For the list of our branches refer to the website: www.sbisecurities.in
 Brigade Hotel Ventures Ltd. Hospitality

Key Financials

Particulars (Rs cr) FY23 FY24 FY25

Revenue from Operations 350.2 401.7 468.3
EBITDA 96.8 141.5 164.4
Adj. PAT 7.9 31.1 23.7
EBITDA Margin (%) 27.6 35.2 35.1
Adj. PAT Margin (%) 2.3 7.8 5.1
ROE (%) 18.8 46.4 27.2
ROCE (%) 7.9 15.1 16.6
P/E (x)* 336.1 85.4 112.4
EV/EBITDA (x)* 33.7 22.9 19.8
Source: RHP, SSL Research
*Note: Pre-issue P/E and EV/EBITDA based on upper price band

Risk Factors
• Termination of management contracts: The company has entered into management contracts with global hospitability
companies for its properties. In the event agreements with hotel operators are terminated prior to their tenure, or if
not renewed, the company may not have access to their brands and loyalty programs.

• Geographical concentration: Brigade Hotel derived ~63% of revenue from hotel properties in Bengaluru in FY25. Any
adverse socio-political development in the city may have adverse impact on business due to higher concentration.

• Delay in completion of new projects: The company has undertaken several initiatives to expand its portfolio to service
the growing industry demand. Any inability to complete projects in stipulated time or other construction related
exigencies may lead to loss of potential business.

• High competition: The company intends to grow the portfolio in other South India cities such as Goa in order to reduce
geographical concentration. High competitive pressure from established players in new geographies may affect growth
plans.

• Negative Reserves and Surplus: BHVL has incurred losses in the past resulting in negative reserves and surplus. In
addition, net worth of the company is low at 10% of the total balance sheet size.

Growth Strategies
• Expand portfolio by developing new hotels at select locations such as Chennai, Bengaluru, Hyderabad and Kochi.
• Focus on improving operating efficiencies through technological intervention and increase revenues led by annual rate
increase, introduction of product suite like weekend package to increase weekend occupancy, etc.
• Pursue inorganic expansion strategy to consolidate market position in cities where it currently operates and also enter
new geographies across India.

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 Brigade Hotel Ventures Ltd. Hospitality

Existing Hotel Portfolio (as of July’25)

Hotel Name Hotel Segment Hotel Operator Number of Keys
Grand Mercure, Bangalore Upscale Accor 126
Sheraton Grand Bangalore at Brigade Gateway Upper upscale Marriott 230
Grand Mercure, Mysore Upscale Accor 146
Upper
Holiday Inn, Chennai OMR IT Expressway InterContinental Hotels Group 202
midscale
Upper
Holiday Inn, Bengaluru Racecourse InterContinental Hotels Group 272
midscale
Four Points by Sheraton, Kochi Infopark Upscale Marriott 218
Grand Mercure, Ahmedabad GIFT City Upscale Accor 151
Upper
Holiday Inn Express & Suites, Bengaluru OMR InterContinental Hotels Group 129
midscale
ibis Styles, Mysuru Midscale Accor 130

Source: RHP, SSL Research

Expansion Plans
Location Hotel Segment Hotel Operator* Expected Completion
Chennai Luxury Beach Resort Hyatt FY28
Bengaluru Upper midscale Marriott FY28
Bengaluru Upper midscale Marriott FY28
Hyderabad Luxury InterContinental Hotels Group FY29
Vaikom, Kerala Luxury Wellness Resort Marriott FY29
Source: RHP, SSL Research
*Entered into an agreement with the mentioned operators

Portfolio Operational Metrics

Particulars FY23 FY24 FY25
Average Room Rate (Rs) 5,944 6,388 6,694
Average Occupancy (%) 70 73 77
Revenue per Available Room (RevPAR- Rs) 4,136 4,681 5,138
Staff to Room Ratio 0.66 0.74 0.74

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 Brigade Hotel Ventures Ltd. Hospitality

Portfolio Operational Metrics

Particulars FY23 FY24 FY25
Grand Mercure Bangalore
Average room rate (Rs) 8,204 9,554 10,318
Average occupancy 81.4% 72.4% 77.0%
Staff to room ratio 0.64 0.69 0.75
Sheraton Grand Bangalore at Brigade Gateway
Average room rate (Rs) 9,767 10,129 11,220
Average occupancy 71.2% 73.5% 78.9%
Staff to room ratio 1.07 1.17 1.25
Grand Mercure Mysore
Average room rate (Rs) 5,200 5,601 5,476
Average occupancy 84.3% 78.7% 77.3%
Staff to room ratio 0.50 0.61 0.70
Holiday Inn Chennai OMR IT Expressway
Average room rate (Rs) 5,168 6,371 5,148
Average occupancy 84.1% 85.1% 83.9%
Staff to room ratio 0.66 0.79 0.81
Holiday Inn Bengaluru Racecourse
Average room rate (Rs) 5,065 5,294 5,831
Average occupancy 76.5% 77.4% 83.1%
Staff to room ratio 0.65 0.66 0.62
Four Points by Sheraton Kochi Infopark
Average room rate (Rs) 3,957 4,382 4,266
Average occupancy 48.6% 69.7% 83.2%
Staff to room ratio 0.50 0.70 0.73
Grand Mercure Ahmedabad GIFT City
Average room rate (Rs) 4,904 5,208 4,551
Average occupancy 39.3% 46.3% 60.1%
Staff to room ratio 0.60 0.60 0.61
Holiday Inn Express & Suites Bengaluru OMR
Average room rate (Rs) 4,018 4,301 5,675
Average occupancy 72.3% 78.3% 77.2%
Staff to room ratio 0.45 0.47 0.43
ibis Styles Mysuru
Average room rate (Rs) - - 4,373
Average occupancy - - 43.3%
Staff to room ratio - - 0.52

Source: RHP, SSL Research

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 Brigade Hotel Ventures Ltd. Hospitality

Industry Overview
All India – Hotel Rooms Supply (in ‘000)
400

FY25-30E CAGR: 9.1%

315
303
300 283
260
233
204
200

100

0
FY25 FY26E FY27E FY28E FY29E FY30E

Source: RHP, SSL Research

All India – Hotel Rooms Demand (in ‘000)

250

FY25-30E CAGR: 10.4%

208
196
200
180
163

150 144
127

100

50
FY25 FY26E FY27E FY28E FY29E FY30E

Source: RHP, SSL Research

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 Brigade Hotel Ventures Ltd. Hospitality

Financial Snapshot
INCOME STATEMENT
Particulars (Rs cr) FY23 FY24 FY25
Revenue from Operations 350 402 468
YoY growth (%) - 14.7% 16.6%
Cost of Services 35 40 45
Gross Profit 315 361 423
Gross margin (%) 90.0% 90.0% 90.4%
Employee Cost 63 76 86
Other Operating Expenses 155 144 173
EBITDA 97 141 164
EBITDA margin (%) 27.6% 35.2% 35.1%
Other Income 6 3 2
Interest Exp. 69 69 73
Depreciation 49 44 50
PBT -16 32 45
Exceptional item/Extraordinary item -11 - -
Tax -1 1 21
Adj. PAT 8 31 24
Adj. PAT margin (%) 2.3% 7.8% 5.1%
EPS 0.3 1.1 0.8

BALANCE SHEET
Particulars (Rs cr) FY23 FY24 FY25
Assets
Net Block 627 651 730
Capital WIP 29 72 20
Intangible Assets 1 1 2
Other Non-current Assets 93 96 108
Current Assets
Current Investment - - -
Inventories 4 6 7
Trade receivables 21 22 23
Cash and Bank Balances 31 20 22
Short-term loans and advances - - -
Other Current Assets 34 20 36
Total Current Assets 90 68 88
Current Liabilities & Provisions
Trade payables 31 27 38
Other current liabilities 48 48 37
Short-term provisions 1 1 2
Total Current Liabilities 81 76 77
Net Current Assets 9 -9 11
Total Assets 760 811 870
Liabilities
Share Capital 1 1 281
Reserves and Surplus -241 -216 -196
CCPS 282 282 2
Total Shareholders’ Funds 42 67 87
Minority Interest 6 12 15
Total Debt 633 601 617
Long Term Provisions 1 1 2
Lease Liabilities 68 118 140
Other Long-Term Liabilities 11 11 9
Total Liabilities 760 811 870

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 Brigade Hotel Ventures Ltd. Hospitality

Cashflows (Rs cr) FY23 FY24 FY25

Cash flow from Operating Activities 108 155 149
Cash flow from Investing Activities 1 (45) (95)
Cash flow from Financing Activities (132) (92) (82)
Free Cash Flow 98 99 54

RATIOS
FY23 FY24 FY25
Profitability (%)
Return on Assets 0.9 3.5 2.5
Return on Capital Employed 7.9 15.1 16.6
Return on Equity 18.8 46.4 27.2
Margin Analysis (%)
Gross Margin 90.0 90.0 90.4
EBITDA Margin 27.6 35.2 35.1
Adj. Net Profit Margin 2.3 7.8 5.1
Short-Term Liquidity
Current Ratio (x) 1.1 0.9 1.1
Quick Ratio (x) 1.1 0.8 1.1
Avg. Days Sales Outstanding 22 20 18
Avg. Days Inventory
45 53 55
Outstanding
Avg. Days Payables 327 247 311
Fixed asset turnover (x) 0.6 0.6 0.6
Debt-service coverage (x) 0.1 0.2 0.2
Long-Term Solvency
Total Debt / Equity (x) 15.0 9.0 7.1
Interest Coverage Ratio (x) 0.8 1.5 1.6
Valuation Ratios
EV/EBITDA (x) 33.7 22.9 19.8
P/E (x) 336.1 85.4 112.4
P/B (x) 63.1 39.7 30.6
EV/Sales (x) 9.3 8.1 6.9
*Valuation ratios are based on pre-issue capital at the upper price band
Source: RHP, SSL Research

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 Brigade Hotel Ventures Ltd. Hospitality

Peer Comparison – Financials (FY25)

Brigade
Indian Ventive
Particulars Hotel ITC Hotels Chalet Juniper Samhi
Hotels Co EIH Ltd. Hospitality
(Rs cr) Ventures Ltd. Hotels Ltd. Hotels Ltd. Hotels Ltd.
Ltd. Ltd.
Ltd.
CMP (Rs) 90 756 247 381 923 811 322 249
Sales 468 8,335 3,560 2,743 1,718 1,605 944 1,130
EBITDA 164 2,769 1,211 1,028 736 745 337 406
Net Profit 24 1,662 635 768 141 123 71 105
Mkt Cap. 3,418 1,07,710 51,386 23,845 20,174 18,944 7,155 5,499
Enterprise
3,254 1,05,753 49,732 22,933 22,542 20,727 8,158 7,557
Value
EBITDA
35.1 33.2 34.0 37.5 42.8 46.4 35.7 35.9
Margin (%)
Net Margin
5.1 19.9 17.8 28.0 8.2 7.7 7.5 9.3
(%)
RoCE (%) 16.6 21.4 8.3 23.6 10.4 7.8 6.9 9.4
RoE (%) 27.2 14.9 5.9 16.6 4.6 2.6 2.6 9.2
P/E (x) 144.5 64.8 80.9 31.0 143.1 154.0 100.8 52.4
EV/EBITDA
19.8 38.2 41.1 22.3 30.6 27.8 24.2 18.6
(x)
EV/Sales (x) 6.9 12.7 14.0 8.4 13.1 12.9 8.6 6.7

For Brigade Hotel Ventures Ltd, the Market cap, P/E(x), EV/EBITDA (x) and EV/Sales (x) are calculated on post-issue equity share capital based on the upper price band.
CMP of 22nd July 2025 for peer companies

Source: RHP, SSL Research

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 Brigade Hotel Ventures Ltd. Hospitality

SBICAP Securities Ltd.

(CIN): U65999MH2005PLC155485 I Research Analyst Registration No INH000000602
SEBI Registration No.: Stock Broker: INZ000200032 | CDSL: IN-DP-314-2017 | NSDL: IN-DP-NSDL-369-2014 | Research Analyst: INH000000602
IRDA/RW/IR2/2015/081 | IRDA/RW/IR1/2016/041 | IRDA: CA0103
Registered & Corporate Office: Marathon Futurex, A Wing, 12th Floor, N. M. Joshi Marg, Lower Parel, Mumbai-400013.

For any information contact us:

022-6854 5555
E-mail: [email protected] I Web: www.sbisecurities.in

DISCLOSURES & DISCLAIMERS:

Analyst Certification: The views expressed in this research report ("Report") accurately reflect the personal views of the research analysts ("Analysts") employed by SBICAP
Securities Ltd. (SSL) about any and all of the subject issuer(s) or company(ies) or securities. This report has been prepared based upon information available to the public and
sources, believed to be reliable. I/We also certify that no part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or
view(s) in this report.
The Analysts engaged in preparation of this Report or his/her relative:-
(a) do not have any financial interests in the subject company mentioned in this Report; (b) do not own 1 or more of the equity securities of the subject company mentioned
in the report as of the last day of the month preceding the publication of the research report; (c) do not have any material conflict of interest at the time of publication
of the Report.
The Analysts engaged in preparation of this Report:-
(a) have not received any compensation from the subject company in the past twelve months; (b) have not managed or co-managed public offering of securities for the subject
company in the past twelve months; (c)have not received any compensation for investment banking or merchant banking or brokerage services from the subject company in
the past twelve months; (d) have not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the
subject company in the past twelve months; (e) has not received any compensation or other benefits from the subject company or third party in connection with the Report;
(f) has not served as an officer, director or employee of the subject company; (g) is not engaged in market making activity for the subject company.

Name Qualification Designation

Sudeep Shah MMS-Finance DVP- Technical & Derivative Research
Sunny Agrawal B.E, MBA (Finance) DVP - Fundamental Research
Rajesh Gupta PGDBM (Finance), MA (Bus. Eco) AVP - Fundamental Research
Monica Chauhan C.A. Research Analyst - Equity Fundamentals
Harsh Vasa CA Research Analyst - Equity Fundamentals
Sumeet Shah B.E., CFA Research Analyst - Equity Fundamentals
Sweta Padhi MBA (Finance) Research Analyst - Equity Fundamentals
Uday Chandgothia B-Tech, MBA (Finance) Research Associate - Equity Fundamentals
Arnav Sane BMS (Finance) Research Associate - Equity Fundamentals
Shubham Purohit BMS (Finance) Research Associate - Equity Fundamentals
Vinit Mishra B.Com Research Associate - Equity Fundamentals
Gautam Updhyaya MBA (Finance) Research Analyst - Equity Derivatives
Vinayak Gangule BE (IT) Research Analyst - Equity Technicals
Ashwin Ramani B.Com Research Analyst- Equity Technicalsss
Sagar Peswani B.Tech (ECE) Research Associate - Equity Technicals
Kalpesh Mangade B.Com MIS Analyst - Retail Research

For other Disclosures please visit: https://bit.ly/R_disclaimer02

Sudeep Shah Sunny Agrawal

DVP – Technical & Derivative Research DVP – Fundamental Research

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