Blackstone-Backed Ventive Hospitality to Launch $190M India IPO on Friday

Ventive Hospitality, an Indian hotel developer, owner and manager backed by Blackstone and local builder Panchshil Realty, will launch an initial public offering this weekend for its 2,036-key portfolio of hotels across India and the Maldives, with the exercise aiming to raise up to INR 16 billion ($190 million).

The REIT IPO will open on 20 December and close on 24 December, according to a red herring prospectus filed Saturday. Some 75 percent of the net issue will be allocated to qualified institutional buyers, with up to 60 percent of the QIB portion assigned to anchor investors bidding for an amount of at least INR 100 million, Ventive said. The anchor investor period will open one day early, on 19 December.

After the capital raise, Ventive plans to continue focusing on development of luxury and upscale hospitality assets and to increase the number of keys in the portfolio by 367 or 18 percent from 2,036 as of 30 September. The boost will come from one project each in Varanasi, Bengaluru and Sri Lanka, with the properties set to be operated or franchised by Marriott.

“We believe that we are well-positioned to benefit from growing hospitality demand in conjunction with relatively low new supply in our key markets,” the developer said in the prospectus. “India is among the fastest growing major economies in the world, while Maldives has been ranked consistently as one of the best tourist island destinations globally.”

Chopping Debt

Initially established as the hospitality division of Pune-based developer Panchshil Realty, Ventive’s portfolio 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 assets 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 in Bengaluru. Ventive owned 64 percent of the luxury key inventory in Pune as of 31 March, according to the company.

Ventive intends to use the net proceeds from the offering to fully or partially repay INR 16 billion in debt. As of 30 September, the company’s outstanding borrowings exceeded INR 36 billion, with finance costs representing 22.3 percent as a share of revenue from operations and 46.1 percent as a share of earnings before interest, tax, depreciation and amortisation.

“We have substantial indebtedness which requires significant cash flows to service and limits our ability to operate freely,” the company said. “Any breach of terms under our financing arrangements or our inability to meet our obligations, including financial and other covenants under our debt financing arrangements could adversely affect our business and financial condition.”

Entries and Exits

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

After listing India’s first REIT in 2018, Manhattan-based Blackstone exited that vehicle, Embassy Office Parks, one year ago with a $854 million stake sale. The disposal followed Blackstone’s sale of its remaining stake in Mindspace REIT, another office trust, to the Abu Dhabi Investment Authority for $235 million in January 2022.

Citing sources familiar with the plans, local media reported earlier this month that, together with local partners Panchshil and Sattva Group, Blackstone aims to raise $1 billion next year from an IPO of a REIT holding a portfolio of Indian commercial properties.

IPOs from Indian companies have raked in $17.3 billion in 2024 to date, almost three times higher than in the comparable period last year, according to data provider LSEG.