HBI Staff | Hyderabad 
Prestige Estates Projects Ltd. is set to list its hospitality business on the market as part of its expansion strategy while managing debt levels. Chairman and Managing Director, Irfan Razack, revealed to NDTV Profit that the board has approved an initial public offer (IPO) for the hospitality segment.
In March, it was reported that Prestige was in talks with Marriott Inc. for a potential deal worth INR 4,250 crore to develop six properties across western and southern India. These properties, comprising 801 keys, will be situated in key locations such as Bengaluru and Goa.
Razack emphasized the preference for equity over debt, stating, “I’d rather share that (equity) pie than have that problem of debt on your head.” The IPO is expected to materialize by the end of the current calendar year, with the offer size yet to be finalized.
Upon listing, parent company Prestige Estates will retain a significant stake in the hospitality arm, which will include both existing inventory and capacity from upcoming projects. According to a note by Motilal Oswal, the hospitality segment, once stabilized, could potentially contribute INR 1,800 crore in revenue, compared to the current INR 900 crore.
Monetizing the hospitality business could help Prestige reduce its gross debt by INR 900 crore, providing relief from cash flow strain associated with the INR 1,700 crore balance capex in the segment, the brokerage firm suggested. As of April 3, the hospitality business accounted for 10% of Prestige’s total revenue of INR 5,713.1 crore from April to December 2023, with the inventory of 1,500 keys expected to double over the next three to four years.
Source : NDTV Profit
