Brigade Hotel Ventures Disappoints with Weak Stock Market Debut

by Priya Bhatiya

Posted on July 31, 2025

Brigade Hotel Ventures had a disappointing stock market debut on July 31, 2025, with shares opening at a discount of nearly 10% compared to their IPO price. On the NSE, shares listed at ₹81.10—a 9.89% drop from the ₹90 issue price. Similarly, the BSE saw shares open at ₹82, an 8.8% discount.

Key Details and Context

• IPO Details: The IPO price band was set at ₹85-90 per share, with the entire issue consisting of fresh equity shares, raising ₹759.6 crore. There was no offer-for-sale (OFS) component.
• Subscription Response: The IPO was subscribed 4.48 times overall, with retail investors showing the most interest (6.40 times subscription), followed by qualified institutional buyers (5.42 times), and non-institutional investors (1.92 times).
• Financial Performance: Despite a 16% revenue growth in FY25 to ₹470.7 crore, profit after tax declined by 24% year-on-year to ₹23.7 crore, keeping investor sentiment muted.
• Grey Market Sentiment: Ahead of listing, the stock had no premium in the grey market, hinting at a cautious approach reflecting concerns about profit growth and sector outlook.
• Reason for Weak Debut: Analysts attribute the weak start to tepid market sentiment toward hospitality stocks, Brigade’s declining profits, and investor concerns about its substantial debt level and narrow profit margins, despite being operationally efficient and benefiting from sector tailwinds.

Company Background

Brigade Hotel Ventures, a subsidiary of Brigade Enterprises, owns and operates nine hotels across major South Indian cities in partnership with global brands like Marriott and Accor. The company is the second-largest owner of chain-affiliated hotels in South India, managing 1,604 keys.

Use of IPO Proceeds

Most of the funds raised from the IPO will be directed toward debt repayment (₹468.14 crore), acquiring a land share from its parent company (₹107.52 crore), and future acquisitions or general corporate purposes.

In summary, Brigade Hotel Ventures’ near 10% drop on debut stems from a mix of subdued market sentiment, weak profit growth, high debt, and no initial investor premium, despite good revenue growth and a strategic position in the hospitality sector.

Ref: Brigade Hotel Ventures shares drop nearly 10 pc in market debut trade