Prestige Estates Projects Ltd has approved an investment of up to Rs 1,625.04 crore in its wholly-owned subsidiary, Prestige Hospitality Ventures Ltd (PHVL), through a rights issue. The investment, which will be carried out in one or more tranches, aims to strengthen PHVL’s hospitality business, which focuses on developing and operating hospitality projects.
PHVL, incorporated in 2017, reported a turnover of Rs 4,161 crore for the financial year ended March 31, 2024. Since the company is a wholly-owned subsidiary, the transaction is categorized as a related-party deal, but Prestige Estates has stated it will be conducted at arm’s length. The company also clarified that its promoters have no financial stake in the transaction.
Also read: Adani Green Energy' subsidiary starts 37.5 MW solar power project in Gujarat’s Khavda
The rights issue is expected to be completed by March 31, 2025, with shares being purchased in cash. Prestige Estates has assured that this move will not alter PHVL’s ownership structure, and the hospitality arm will remain fully owned by the parent company.
The announcement comes at a time when Prestige Estates is navigating financial headwinds. The company reported an 84.8 percent drop in consolidated net profit for the third quarter of the financial year. Revenue declined 7.9 percent year-on-year to Rs 1,654.50 crore, down from Rs 1,795.80 crore a year earlier. However, EBITDA rose 7 percent to Rs 590.10 crore, with margins improving to 35.7 percent from 30.7 percent.
Read more: NSE knocks SEBI door again for all-important NOC for proposed IPO
On Friday, shares of the company closed at Rs 1,180, lower by 2.16 percent from the last close on the NSE. Prestige Estates Projects shares have cracked 36 percent in the last six months and about 28 percent since the start of the year.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
