Brigade Hotels IPO opens; MD Nirupa Shankar details luxury expansion and zero debt plan

Brigade Hotel Ventures, the hospitality arm of Bengaluru-based real estate firm Brigade Enterprises, has opened its ₹759.6 crore initial public offering (IPO) for public subscription from July 24 to 28.Managing Director Nirupa Shankar said the funds will primarily be used to repay debt, making the company virtually debt-free after the issue. The fresh capital comes at a time when the company is gearing up for its next growth phase—five new hotels with around 1,000 rooms expected to come up by FY30. “Hotels have a longer construction cycle, around three years,” she explained, adding that most of the funding requirement will be back-ended.

The company is looking to improve average room rates (ARRs) through a strategic push into luxury. New projects include a Ritz-Carlton in Kerala, an InterContinental in Hyderabad, and a Grand Hyatt in Chennai. According to Shankar, “Going forward, we are looking to enhance our portfolio in the luxury deluxe segment,” which will help raise ARRs as these hotels become operational.

Brigade follows a build-and-own model and partners with global hotel brands like Marriott, Accor, and InterContinental Hotels Group (IHG) for operations. It pays a fixed percentage of revenue as management fees—currently steady at 4–5% and expected to remain so. The land strategy is a mix of owned and leased properties, with about 50% of its current portfolio on long-term leases, depending on market economics.

Also Read: Brigade Enterprises expects property prices in Bengaluru to remain firm, will stay away from Mumbai market

Shankar also clarified that while the company had considered a real estate investment trust (REIT) structure earlier, it chose to pursue a standalone hospitality listing to maintain sharp operational focus. “Hospitality is a very different business model… better to grow that company individually,” she said.

On gearing, the company is comfortable with a peak debt-to-equity ratio of 2:1 during construction-heavy phases, but intends to keep it closer to 1.5:1 on average.

Also Read: Leela Hotels parent Schloss plans 8 new properties, returns to Mumbai with BKC project

The real estate firm, Brigade Enterprises, currently has a market capitalisation of around ₹26,592.5 crore. Its stock has fallen by nearly 12% over the past year.

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