Prestige Estates Projects, headquartered in Bengaluru, aims to secure approximately Rs.2,000-3,000 crore from its upcoming initial public offering (IPO) for its hospitality business. The firm has enlisted the services of JM Financial, JP Morgan, and CLSA.
The company anticipates a valuation ranging from Rs.17,000 to Rs.20,000 crore for its hospitality business.
Previously, the organization had stated that the separation of its hospitality division is progressing as planned, and the initial sale of shares is anticipated to occur in 2024.
Prestige Estates informed the press that raising capital is a customary practice in the real estate industry. They are currently considering raising funds for several projects, including those in the hospitality sector, and are in the midst of determining the appropriate course of action for this endeavor.
The company aims to double its hospitality portfolio within the next three to four years, investing a total of Rs.1,700 crore.
At present, Prestige Estates oversees 1,849 hospitality assets across India.
Furthermore, the company is considering the monetization of its hospitality portfolio, which will result in unlocking additional value.
According to reports, the anticipated progress in the hospitality sector is expected to have a significant impact on the financial situation of the company. It is projected that this progress will lead to a reduction of Rs.900 crore in gross debt, which will greatly alleviate the financial burden on the company. This reduction in debt will provide some relief from the cash flow pressure that has been associated with the Rs.1,700 crore balance capital expenditure in the hospitality sector.
Overall, the projected reduction in gross debt and the relief from cash flow pressure are positive outcomes for the company. They signify a step towards financial stability and improved performance. With these developments, the company can focus on its core business operations, enhance its competitiveness, and drive sustainable growth in the hospitality sector.
Prestige Estates Projects Ltd. witnessed a decline of almost 2% as its shares settled at Rs.1,840 per share on the NSE. In the year 2024, the stock has experienced a significant increase of 55% thus far.
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