Brigade Hotel makes weak market debut, shares list 10% below IPO price

Brigade Hotel IPO subscribed 4.76x

The ₹759.60-crore IPO of Brigade Hotel, which opened between July 24 and July 28, was subscribed 4.76 times. The offer, which was entirely a fresh issue of equity shares, was subscribed 6.83 times in the retail category, 5.74 times in the qualified institutional buyer segment, while the quota reserved for the non-institutional investor was booked 2.03 times.

The Bengaluru-based company intends to use IPO proceeds for debt repayment, land acquisition, and business expansion. The company will use ₹481 crore to repay debt, while ₹107.5 crore will be utilised for acquiring the undivided share of land from its promoter, Brigade Enterprises. The remaining funds will be used for inorganic growth opportunities and other general corporate purposes.

Ahead of the IPO, Brigade Hotel raised ₹325 crore from 17 anchor investors. The company, engaged in hotel ownership and real estate development across South India, allotted 3.6 crore equity shares to anchor investors at ₹90 per equity share, with a face value of ₹10 each.

Out of the total allocation, 2.55 crore equity shares, or 70.64%, of the anchor book, were allocated to 6 domestic mutual funds through a total of 12 schemes. The anchor book saw participation from a wide variety of marquee investors, including SBI Mutual Fund, Franklin India Mutual Fund, 360 One Mutual Fund, Axis Mutual Fund, Motilal Oswal Mutual Fund, Bandhan Mutual Fund, Edelweiss Mutual Fund,  Nuvama Mutual Fund, and others.