The Rs 760-crore IPO of Brigade Hotel Ventures was subscribed nearly 4.5 times its offer size on its third and final day of public bidding (July 28). Retail investors led the subscription race, booking their reserved portion over 6 times.
The maiden public issue of the subsidiary of Bengaluru-based real estate company Brigade Enterprises, received bids for nearly 22.95 crore shares, as against the offer size of 5.12 crore shares, according to data on NSE. Qualified Institutional Buyers (QIB) booked their reserved portion over 5 times, while Non Institutional Investors (NII) subscribed their quota nearly 2 times.
Brigade Hotel Ventures IPO: Key details
The company had launched its IPO to raise funds from the capital markets through a fresh issue of equity shares worth Rs 759.6 crore with no offer-for sale (OFS) component, at a price band of Rs 85-90 per share. Investors could bid for a minimum of 166 shares, requiring an investment of Rs 14,940 at the upper price band, and in multiples thereafter.
The allotments are likely to be finalized on July 29, and the shares are likely to be listed on BSE and NSE on July 31.
Brigade Hotel Ventures IPO GMP
Despite the strong investor interest, the unlisted shares of the company were trading flat at Rs 90 apiece with zero grey market premium over the IPO price in the grey market, according to data on Investorgain. The GMP has fallen from the 19 percent earlier quoted by the site on July 21.
According to IPO Watch, the unlisted shares of the company were trading with a GMP of 5.55 percent over IPO price.
"The issue is priced at an EV/Sales multiple of 7.3x, in line with industry peers, making the valuation appear reasonable given its strong fundamentals. The IPO offers a compelling opportunity to participate in the premium hospitality space amid strong sector tailwinds. Investors can expect stable returns in the medium term and meaningful compounding potential over the long term, driven by deleveraging, margin stability, and network expansion," said Ratiraj Tibrewal, CEO, Choice Capital.
Bajaj Broking had said investors should subscribe to the issue for the long term.
Proceeds from the issue to the tune of Rs 468.14 crore will be used for the payment of debt; Rs 107.52 crore will be utilised for the purchase of an undivided share of land from the promoter, BEL; and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.
Earlier this month, Brigade Hotel Ventures raised Rs 126 crore by selling equity shares to 360 ONE Alternates Asset Management.
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