Blackstone-Backed Ventive Hospitality Files for $238M India IPO

Ventive Hospitality, an Indian hotel developer, owner, and manager backed by Blackstone and local builder Panchshil Realty, is preparing to list its 2,036-key portfolio of hotels across India and the Maldives in an IPO that could raise up to INR 20 billion ($238 million).

Ventive on Tuesday filed a draft red herring prospectus for the REIT with the Securities and Exchange Board of India according to announcements to the Bombay Stock Exchange and the National Stock Exchange of India, with the company pointing to a mismatch between customer needs and current hotel availability in India.

“We believe that we are well-positioned to benefit from growing hospitality demand in conjunction with relatively low new supply in our key markets,” Ventive said in the draft prospectus. “We plan to continue focusing on our core strength of developing luxury and upscale hospitality assets and to increase the number of keys across our hospitality assets by an estimated 367 keys…through our planned development and expansion initiatives.”

While the quantity of shares to be issued and the issue price have yet to be determined, Ventive said it intends to use the net proceeds from the offering to fully or partially repay INR 16 billion of debt. Blackstone declined to comment on the planned IPO, while Panchshil Realty and Ventive Hospitality had not responded to Mingtiandi inquiries by the time of publication.

Luxury Portfolio

Initially established as the hospitality division of Pune-based developer Panchshil Realty, Ventive’s portfolio now comprises 11 hotels, with five luxury properties accounting for over 80 percent of the company’s pro forma hotel revenue over the last three fiscal years.

Those high-end hostelries include the 415-key JW Marriott Pune; the 198-key Ritz Carlton Pune; the 197-key Anantara Maldives; the 151-key Conrad Maldives; and the 167-key Raaya by Atmosphere Maldives.

The remaining six hotels include four properties in Pune – Marriott Suites, DoubleTree by Hilton, Oakwood Residences and Courtyard by Marriott – as well as the Marriott Aloft Whitefield and the Marriott Aloft Outer Ring Road, both located in Bengaluru. Ventive owned 64 percent of the luxury key inventory in Pune as of 31 March, according to the company.

A Blackstone-managed fund acquired a half stake in Ventive in 2017, with entities of the private equity giant currently holding a 36.22 percent interest in the company, according to the draft prospectus.

In the fiscal year ended 31 March, occupancy and room rates across Ventive’s portfolio averaged 59.5 percent and INR 19,976 ($238) respectively, while average revenue per available room (revPAR) stood at INR 11,881 ($141).

The company also has three hotels totaling 367 keys under development, including one property each in Varanasi, Bengaluru, and Sri Lanka, with the properties set to be operated or franchised by Marriott.

“We plan to focus on increasing our revPAR through leveraging our leadership position in our key markets and established relationships with leading hotel operators,” Ventive said in the draft prospectus. “We intend to continue to capitalise on the quality of our management and scale of our existing portfolio to further drive operational efficiencies, reduce costs and improve margins.”

Office Income Boost

In addition to its hospitality portfolio, Ventive also owns three grade A office properties and a mall in Pune, with the quartet of assets totaling 3.4 million square feet in leasable area.

Those properties include the 930,000 square foot ICC Offices and 440,000 square foot ICC Pavillion mall, which along with the JW Marriott Pune constitute part of the ICC Convention Centre, as well the 1.8 million square foot Business Bay and 220,000 square foot Panchshil Tech Park.

Committed occupancy within the office portfolio averaged 96.65 percent as of 31 March, while the ICC Pavillion mall was 99.6 percent leased at that time. 80 percent of the office space is leased to multinational companies, with HSBC, Deutsche Bank, Nokia, Vodafone, and PwC highlighting the tenant roster. The office properties command rents exceeding the Pune market average by 29 percent, according to the company.

Ventive generated INR 19.1 billion of pro forma total income in the fiscal year ended 31 March, representing an 8.2 percent year-on-year increase. Revenue from hotel operations accounted for 72 percent of that top line, while the office and retail properties generated 24 percent of total income.

Over the same fiscal year, Ventive logged INR 8.7 billion of pro forma EBITDA, representing an EBITDA margin of 45.6 percent, but incurred a loss of INR 667.5 million.

India IPO Frenzy

Ventive’s planned IPO comes amid a busy year for IPOs in India, with about 200 companies having raised more than $7 billion so far this year, more than double the amount raised during the same period last year, according to data provider LSEG. India’s stock market has hit record highs more than 50 times year-to-date, with IPOs having been oversubscribed by an average of 48 times, according to analysts.

The planned IPO also comes as JLL is forecasting $413 million of investment in Indian hospitality assets this year, representing a 22 percent increase from 2023, according to a report this week by the consultancy.

Ventive expects key inventory in India to grow at a compound annual growth rate of 9.3 percent between the fiscal years ended 31 March 2024 and 31 March 2027, with growth in Pune and Bengaluru over the same period to be more limited at 2.5 percent and 3.3 percent, respectively.