Prestige Hospitality Plans $318 Million IPO

Prestige Hospitality Ventures, part of the property development company Prestige Group, plans to raise up to INR 27 billion ($318 million) in its upcoming IPO.

In its Draft Red Herring Prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI) this weekend, Prestige said it is also considering a pre-IPO placement of up to INR 3.4 billion ($40 million).

The IPO market in India has been heating up. Prestige’s filing comes almost 5 months after Brigade Hospitality filed an IPO. Brigade got a nod from regulators in February, but hasn’t yet gone public.

Last September, Schloss Bangalore, the luxury hospitality group behind India’s The Leela Palaces, filed for a $599 million (INR 50 billion) IPO, the largest ever in India’s hotel industry. Earlier this year, ITC demerged its hotel business as a separate entity: ITC Hotels.

According to Prestige’s draft prospectus, around INR 11 billion ($129 million) will go toward repaying or prepaying existing loans, trimming interest costs and improving the balance sheet.

The remaining funds will support growth through targeted acquisitions of stressed or strategically located hotel assets.

How Prestige Hospitality Makes Money?

Prestige Hospitality Ventures focuses on owning and developing high-end hotels and resorts in India. Rather than operate the hotels directly, the company’s strategy is “asset ownership.” Prestige Hospitality outsources day‐to‐day management to global operators under long‐term service agreements, typically 20 to 35 years in length, with renewal options. 

Under these contracts, operators such as Marriott International (St. Regis, JW Marriott, Edition, W Hotels, Sheraton, Autograph Collection, Tribute Portfolio and Moxy); Hilton (Conrad); and Banyan Tree (Angsana) handle revenue management, staffing, procurement and routine maintenance, in exchange for base and incentive fees and royalties on hotel trademarks. 

This model allows Prestige to capture the upside of asset performance and property appreciation while leveraging the brand, distribution and operational expertise of leading hospitality groups.

The company generates revenues primarily through room rentals, food and beverage, banqueting, and ancillary services. Convention centers attached to certain properties (like Sheraton Grand Bengaluru) provide significant event-driven revenue streams.

Where Are The Hotels Located?

As of December 31, 2024, Prestige’s asset portfolio comprised seven operating hotels totaling 1,445 keys, one of which is currently being renovated and rebranded from 178 to 190 keys. 

It also has 12 properties in various stages of development: three “ongoing” assets with 951 expected keys, and nine “upcoming” assets with 1,558 expected keys​, across Goa, Mumbai, Hyderabad, and Bengaluru.

Marriott will operate all 12 properties.

“We rely extensively on Marriott International for our hospitality assets operations,” Prestige said in its DRHP. 

Five out of its 7 operating hotels are operated by Marriott International with revenue from sale of hospitality services of hospitality assets operated by Marriott International contributing to 69.12% and 63.26% of its total revenue from sale of hospitality services for the nine months ended December 31, 2024 and fiscal 2024. 

“All three ongoing hospitality assets and all nine upcoming hospitality assets are to be operated by Marriott International,” the DRHP read. 

These properties are located in key business and leisure markets, including prime business districts and airport corridors — Whitefield in Bengaluru, Aerocity in Delhi, and HITEC City in Hyderabad.

Major urban centres such as Mumbai, Delhi, Bengaluru, Chennai, Hyderabad and Goa, which together account for roughly half of India’s hotel key supply and nearly 60% of air traffic, remain the focus for both new supply and demand generation, the DRHP stated.

The Financials So Far…

Prestige said its operating portfolio in fiscal 2024 delivered an average room rate (ARR) of INR 14,223 ($167) and an occupancy of 59%, yielding a RevPAR of INR 8,440 ($100).

While occupancy lagged peer averages, with Chalet Hotels and others achieving closer to 74%, Prestige’s ARR remains competitive, reflecting the largely upper‐upscale positioning of its assets. 

Prestige reported total income of INR 10.2 billion ($120 million) for the year ended March 31, 2024, a 2.4% decrease from the prior year due to the renovation‐related downtime; by comparison, the broader market saw double‐digit growth as hotels reopened fully post‐pandemic.