Ventive Hospitality, backed by Blackstone, saw overwhelming demand for its INR 1,600 crore IPO, oversubscribed 9.82 times. Investors bid for over 14.17 million shares, with non-institutional investors leading at 13.87 times subscription. Qualified institutional buyers (QIBs) and retail investors subscribed 9.08 and 5.94 times, respectively. The IPO, priced at INR 610, INR 643 per share, raised INR 719 crore from anchor investors. Funds will primarily reduce debt. Ventive owns 11 luxury properties in India and the Maldives, partnering with brands like Marriott and Hilton. This marks a strong recovery in India's hospitality sector, projected to grow over 10% CAGR post-pandemic.
Ventive Hospitality, a company backed by Blackstone, has seen significant interest in its initial public offering (IPO), which closed on Tuesday with a subscription rate of 9.82 times. This strong response indicates growing investor confidence in the hospitality sector, particularly as the industry rebounds from the impacts of the COVID-19 pandemic.
The IPO received bids for over 14.17 million shares against 1.44 million shares available for subscription, according to data from the National Stock Exchange (NSE). Notably, non-institutional investors showed the most enthusiasm, subscribing 13.87 times their allotted shares. Qualified institutional buyers (QIBs) also demonstrated strong interest, with a subscription rate of 9.08 times, while retail individual investors (RIIs) subscribed 5.94 times their portion.
Ventive Hospitality has successfully raised INR 719 crore from anchor investors ahead of the IPO, which is priced between INR 610 and INR 643 per share. The entire offering consists of new equity shares amounting to INR 1,600 crore, with no existing shares being sold in the offering. The funds raised will primarily be used to pay down debt, including accrued interest, which is vital for the company as it seeks to strengthen its financial position.
Formerly known as ICC Realty, Ventive Hospitality is a joint venture between the US-based Blackstone Group and Panchshil Realty. The company focuses on owning and managing luxury hospitality assets in India and the Maldives. As of September 2024, Ventive operates 11 properties with a total of 2,036 keys, catering to both business and leisure travelers. Its portfolio includes partnerships with well-known global brands such as Marriott, Hilton, Minor Hotels, and Atmosphere.
The hospitality sector in India is on an upward trajectory, driven by a resurgence in travel demand and increased domestic tourism. According to industry reports, the Indian hotel industry is expected to see a compound annual growth rate (CAGR) of over 10% in the coming years. This growth is fueled by rising disposable incomes, a growing middle class, and the government's initiatives to boost tourism.
The IPO of Ventive Hospitality comes at a crucial time as the hospitality industry is recovering from the pandemic's challenges. Investors are keen to capitalize on this growth potential, particularly in luxury and upscale segments. The company's strategic focus on high-quality assets and partnerships with established global operators positions it well to benefit from the sector's expansion.
As the IPO process unfolds, market analysts will be closely watching Ventive Hospitality's performance in the coming months, as it could set the tone for future listings in the hospitality sector. The involvement of major investment banks and financial institutions as book-running lead managers, including JM Financial, Axis Capital, and ICICI Securities, also adds credibility to the offering.
In conclusion, Ventive Hospitality's IPO reflects a broader trend of renewed investor interest in the hospitality industry, highlighting the potential for growth as travel resumes. With a strong foundation and a clear strategy, Ventive is poised to navigate the evolving landscape of the hospitality market in India and beyond.
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