Ventive Hospitality IPO: Price band to competitors, check key details ahead of December 20 launch

Ventive Hospitality Ltd is set to launch its ₹1,600-crore initial public offering (IPO) this week on Friday, December 20.

The company on Tuesday announced the price band of the mainboard issue at ₹610 to ₹643 per share. The minimum bid quantity to apply for the IPO by the retail investors has been fixed at a single lot of 23 shares.

The Ventive Hospitality IPO is entirely a fresh issuance of 2.49 crore shares, with no offer-for-sale (OFS) component. The subscription will close on Tuesday, December 24.

The IPO share allotment status is expected to be finalised on Thursday, December 26.

The stock is expected to be listed on both the BSE and the National Stock Exchange of India (NSE) on Monday, December 30.

If you are planning to invest in the Ventive Hospitality IPO, here are all the important details about the company that you should know beforehand:

Business model

Ventive Hospitality Ltd is predominantly a hospitality asset owner focused on luxury offerings across business and leisure segments in India and the Maldives. All its hospitality assets are operated by or franchised from global operators, including Marriott, Hilton, Minor and Atmosphere.

Until August 2024, its portfolio consisted of an integrated hospitality-led development comprising JW Marriott, ICC Offices and ICC Pavilion in the Pune city. In August 2024, the company acquired 10 operational hospitality assets (seven in India and three in Maldives) and two hospitality assets under development (one each in India and Sri Lanka). It also purchased two ‘Grade A’ office assets.

The company’s promoters are Atul I. Chordia, Atul I. Chordia HUF, Premsagar Infra Realty Pvt. Ltd, BRE Asia ICC Holdings Ltd and BREP Asia III India Holding Co VI Pte. Ltd.

Strengths

• Among listed hospitality companies in India, Ventive Hospitality’s pro forma revenue was the third highest in each of FY24 and FY23 and second highest for FY22. Its pro forma Ebitda was also the third highest in FY24 and second highest for each of FY23 and FY22. Ebitda refers to earnings before interest, tax,depreciation and amortisation.
• The company has renowned promoters with both global and local expertise -- Panchshil Promoters and the BRE Promoters. The Panchshil Group is affiliated with Panchshil Realty, one of India’s leading luxury real estate developers. The BRE Group is affiliated with Blackstone, the largest investor in hotels globally based on the number of keys, with over 161,000 keys as at September 30, 2024.

Weaknesses

• Most of the company’s hospitality assets are operated by or franchised from Marriott and Hilton, collectively comprising 8 out of 11 operational hospitality assets, contributing around 78% to the keys in its hospitality portfolio (as of September 30, 2024). If these agreements are terminated or not renewed, its business, results of operations, cash flows and financial condition may be adversely affected.
• Prior to the Acquisition Transactions mentioned above, the company’s total income on a restated basis was derived from assets located in Pune. Any adverse developments affecting such assets or locations could have an adverse effect on our business.
• The company is in the hospitality business that is subject to seasonal and cyclical variations. This could result in fluctuations of operations and cash flows.

Key competitors

Ventive Hospitality operates its businesses in an intensely competitive and highly fragmented environment. Competition in the Indian hospitality industry has grown over the last few years due to the influx of international players.

It also faces increased competition from alternative accommodation options such as luxury homestays and bed and breakfast players. Some major competitors of the company in the segment include Indian Hotels Co. Ltd, ITC Hotels, The Oberoi Group, Lemon Tree Hotels, Taj Hotels and Oyo Rooms, among others.

Key Financials

Use of IPO proceeds

The company plans to utilise the IPO funds for repayment/ prepayment, in part or full, of certain borrowings availed by the company and its subsidiaries. A portion of the funds will also be used for general corporate purposes.