Prestige Estates Projects, one of India’s top real estate developers, is all set to launch an IPO of INR 4,000 crore for its hospitality business to unlock value and strengthen its balance sheet. Despite global market volatility, investor interest in real estate and hospitality sectors is still hot.
As per reports, the IPO will be a mix of fresh equity and Offer for Sale (OFS). The Prestige Group board has approved the IPO and the Draft Red Herring Prospectus (DRHP) is in final stages. The company is expected to file the DRHP by end of April or early May 2025.
Prestige Hospitality IPO Objectives: Debt Reduction and Expansion
The IPO aims to raise INR 4,000 crore (approximately USD 599 million). The funds will primarily be deployed for two key purposes:
- Expansion of the Hospitality Portfolio: Prestige Group will use a major chunk of the proceeds to build new premium hotels and resorts across India and expand its presence in the growing hospitality space.
- Debt Repayment: A significant portion of the raised capital will be used to reduce existing debt and improve the company’s financials and credit profile.
Prestige Hospitality Portfolio: A Growing Empire
The hospitality division under Prestige Group includes 10 high-end properties in major cities, particularly in Bengaluru and Kochi. Among these are:
- JW Marriott Bengaluru Prestige Golfshire
- Sheraton Grand Hotel & Convention Centre, Whitefield
- Conrad Bengaluru
- Moxy Bengaluru Airport
- Angsana Oasis Spa & Resort
- The Artiste Kochi
- Twenty Four Hotel at Prestige Tech Park
- Mulberry Shades, Devanahalli
- The Golfshire Club
These properties have bolstered the group’s reputation in the luxury hospitality segment and are now being positioned to unlock shareholder value through the IPO route.
Investment Banking Support and Market Sentiment
Prestige Group has engaged top investment banks including Kotak Mahindra Capital, JM Financial, JP Morgan, and CLSA to manage the IPO process. A dedicated sub-committee within the company has been set up to ensure seamless execution of the public offering.
This IPO comes on the back of successful listings of other hospitality players such as Samhi Hotels and Juniper Hotels, indicating robust market appetite for quality hospitality assets.
Strong Operational Performance in FY24 and Q4 FY25
Prestige Estates has been riding a wave of strong performance, particularly in Q4 of FY25. As per regulatory filings and market reports:
- Q4 FY25 sales bookings surged 48% YoY to INR 6,957 crore, with 2,301 units sold and sales volume of 4.49 million sq. ft.
- Average realization for apartments and commercial properties increased 25% YoY to INR 15,524 per sq. ft.
- Despite delays in approvals full year launches, FY24 saw pre-sales of INR 21,000 cr, the highest ever for the company.
- FY25 pre-sales dropped to INR 17,023 cr, a 19% YoY decline mainly due to project approval delays.
Chairman and Managing Director Irfan Razack said “FY25 was a mixed bag. “FY25 brought a mix of achievements and challenges. Despite delays, our Q4 performance showed strong traction in sales and realisation. We remain optimistic about FY26 with new market entries and marquee launches in NCR and Mumbai,” Razack stated.
Prestige Group: A Legacy of Real Estate
Founded in 1986, Prestige Group has grown to be one of India’s largest real estate conglomerates with a diversified portfolio across residential, commercial, retail, hospitality and property management. With over 180 million sq. ft. delivered and more than 300 projects completed, Prestige has established itself in South India and is now expanding to other metro cities.
Outlook
With Prestige Hospitality IPO, the Prestige Group is going to unlock value for its stakeholders and strengthen its position in India’s luxury hospitality space. The timing is perfect given the post pandemic travel boom and investor interest in real estate and hospitality assets as safe havens in a global uncertainty. Investors and market watchers are keeping a close eye on this offering which could be one of the top IPOs of 2025.