Blackstone-Panchshil Realty's Ventive Hospitality to Open Rs 1,600-Crore IPO for Subscription on December 20
Ventive Hospitality, a hospitality company backed by real estate developer Panchshil Realty and investment firm Blackstone, is set to launch its Initial Public Offering (IPO) on December 20, 2024. This IPO, which is entirely a fresh issue of shares, is valued at ₹1,600 crore. Importantly, there is no offer-for-sale (OFS) component in this offering, meaning that no existing shares are being sold by the promoters.
The IPO includes a reservation of shares worth ₹1 crore specifically for the company’s employees. The offer is set to open for public subscription on December 20, 2024, and will close on December 24, 2024. The anchor book for the IPO will be launched on December 19, 2024.
The offer size will be divided as:
- 75% for Qualified Institutional Buyers (QIBs)
- 10% for Retail Investors
- 15% for Non-Institutional Investors (NIIs)
Out of the total ₹1,600 crore, ₹1,400 crore will be utilized for repaying the company's existing debt, which as of September 2024 stood at ₹3,609.5 crore. The remaining funds will be used for general corporate purposes. This debt repayment is critical for Ventive Hospitality, as it seeks to strengthen its financial position and reduce its liabilities.
Ventive Hospitality owns and operates 11 hospitality assets, including hotels and resorts in India and the Maldives, with a total of 2,036 keys across various segments, including luxury, upper upscale, and upscale. The company competes with a number of well-established listed players in the hospitality sector, such as Chalet Hotels, Samhi Hotels, Juniper Hotels, and Indian Hotels Company.
Ventive’s portfolio, which spans two countries, reflects the growing demand for luxury hospitality and diverse market coverage. However, it faces competition from these larger industry players, making it crucial for Ventive to strategically manage its assets and financials in the years ahead.
For the financial year ending March 2024, Ventive Hospitality reported revenue of ₹1,842 crore, an 8.4% increase from ₹1,699.4 crore in the previous year. However, the company posted a net loss of ₹66.7 crore for FY 2024, a significant decline from the previous year's profit of ₹15.7 crore.
In the first half of FY 2025, Ventive incurred a loss of ₹137.8 crore on revenues of ₹846.4 crore. This loss highlights the ongoing financial challenges the company faces, which it hopes to address with the proceeds from the IPO, primarily aimed at reducing its debt load.
The IPO is being managed by a consortium of leading merchant bankers, including JM Financial, Axis Capital, HSBC Securities, ICICI Securities, IIFL Capital Services, Kotak Mahindra Capital Company, and SBI Capital Markets. These institutions will assist Ventive in navigating the IPO process and ensuring its success.
The hospitality sector in India has seen a steady recovery, driven by an increase in domestic and international travel post-pandemic. Ventive Hospitality’s diversified portfolio, including properties in both India and the Maldives, positions it well to capitalize on these trends. However, the company's financial health remains a concern, as reflected in its net losses.
By reducing its debt burden, the company aims to improve its financial stability, which is essential for sustaining its growth trajectory. Moreover, with the ongoing growth in the hospitality sector, particularly in the luxury and upscale segments, Ventive's future prospects could improve if it successfully leverages its assets and optimizes operational efficiency.
With prominent institutional backing and an experienced management team, Ventive aims to enhance its position in the competitive hospitality market, even as it works to address its financial challenges.
