Prestige Group, one of India’s leading real estate developers headquartered in Bengaluru, is preparing to launch an Initial Public Offering (IPO) worth Rs 4,000 crore for its hospitality business. This move comes amid increased investor interest in real estate and hospitality sectors, viewed as safer investment options in the wake of global economic turbulence.

IPO Details and Structure

Sources familiar with the matter have confirmed that the company’s board has approved the IPO proposal. The process for the Draft Red Herring Prospectus (DRHP) is in advanced stages and likely to be filed by the end of April or early May 2025.

The IPO will comprise both primary and secondary share sales, with the primary capital aimed at funding the development of new hospitality properties and reducing debt on the company’s books. Prestige Group is working alongside four investment banks, including Kotak Mahindra Capital and JM Financial, to manage the IPO.

Why Investors Are Betting on Real Estate and Hospitality

In light of global market volatility, particularly driven by US President Donald Trump's aggressive trade and tariff policies, sectors like real estate and hospitality have come to be seen as relatively stable investment avenues. This perception has encouraged several companies to consider IPOs or Qualified Institutional Placements (QIPs).

A financial industry source noted, “There is strong investor interest in these sectors as they are expected to weather macroeconomic fluctuations better in the near term.”

Prestige Group’s Hotel Portfolio

Prestige’s hospitality division includes a robust portfolio of premium properties, mostly located in Bengaluru:

• Sheraton Grand Hotel & Convention Centre, Whitefield

• JW Marriott Hotel, Devanahalli

• Hilton Conrad Hotel, Bengaluru

• Mulberry Shades, Devanahalli

• Angsana Oasis Resort & Spa, Yelahanka

• Twenty Four Business Hotel, Prestige Tech Park

• Moxy Bengaluru Airport Hotel, under Marriott

• The Artiste Resort, Kochi

This diversified and upscale portfolio puts Prestige in a strong position to attract institutional and retail investor interest.

Hospitality IPO Momentum in India

The hospitality sector in India has recently become a hotspot for IPOs, reflecting the booming travel and tourism trends—particularly among younger Indian consumers. Several recent IPOs in this sector have drawn strong investor participation:

• The Leela (Brookfield-owned) filed for a Rs 5,000 crore IPO in September 2024.

• Brigade Enterprises, another Bengaluru-based developer, has filed papers for Brigade Hotel Ventures.

• Ventive, backed by Blackstone and Panchshil, raised Rs 1,600 crore in December 2024; the stock is now trading 16% above its issue price.

• Juniper Hotels, operating seven Hyatt properties, raised Rs 1,800 crore in February 2024; its stock is currently 20% below issue price.

• Apeejay Surrendra Park Hotels raised Rs 920 crore with a wide range of brands like The Park and Zone Connect; the stock is trading slightly above its issue price.

• SAMHI Hotels Ltd, which runs a portfolio of 31 hotels, raised Rs 1,370 crore in September 2023 and has seen a 40% rise in its stock since listing.

This strong momentum indicates positive sentiment towards hospitality offerings, particularly those with established brands and strong operational footprints.

Strategic Outlook

For Prestige Group, this IPO is expected to be a strategic move not only to raise capital but also to unlock value in its hospitality portfolio. The IPO will also help separate its hospitality vertical from its core residential and commercial real estate businesses, giving investors a more focused opportunity.

The Prestige IPO, if successful, could become one of the largest hospitality IPOs in India and will set the tone for other companies considering similar moves.

With real estate and hospitality becoming the go-to sectors for cautious investors amid international uncertainties, Prestige Group’s hotel IPO appears well-timed to capitalise on both market sentiment and sectoral growth.

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