Ventive Hospitality to raise Rs 1,600 crore through IPO to reduce debt

Blackstone-backed Ventive Hospitality, a hotel asset management company, on Tuesday said that it is looking to raise Rs 1,600 crore through its initial public offering (IPO), most of which would be used to repay its debt.

 

The IPO will open on December 20, and close on December 24.

 

“Out of about Rs 1,600 crore, Rs 1,400 crore will be used for repaying the debt,” Mustafa Hussain, president, Finance and Strategy, Panchshil Realty told Business Standard at the sidelines of the company’s IPO conference. “Post that, the net debt will be about Rs 1,500 crore that will be only 1.2 per cent of our Ebitda.”

 

The IPO comprises fresh issues of shares worth Rs 1,600 crore with a face value of Rs 1 each. The price band of the issue is fixed at Rs 610 to Rs 643 per equity share. A discount of Rs 30 per equity share is being offered to eligible employees bidding in the Employee Reservation Portion.

 

The investors can bid for a minimum of 23 equity shares and in multiples of 23 equity shares thereafter.

 

The hotel company with a primary focus on luxury offerings across business and leisure segments is a joint venture between Pune’s Pranchil Realty and Blackstone, where the former holds two-thirds of the company.

 

All of the hospitality assets of the company are operated by or franchised from global operators, including Marriott, Hilton, Minor and Atmosphere. Currently, the company has a portfolio of hotels in India and Maldives.

 

JM Financial, Axis Capital, HSBC Securities and Capital Markets (India), ICICI Securities, IIFL Securities, Kotak Mahindra Capital Company and SBI Capital Markets are the book running lead managers (BRLM) to the issue.

 

In terms of expansion, Atul Chordia, chairman, Panchshil Realty and executive director, Ventive Hospitality, said that the company selects hotel assets where they can get up to 22 per cent yield on capital.

 

The company currently has under construction and growth of assets in Varanasi, Bangalore, Sri Lanka, New Bombay and Pune.