Table of content
Ventive Hospitality IPO Analysis
Ventive Hospitality Introduction
Ventive Hospitality, backed by Blackstone, offers luxury hotels and resorts in India and the Maldives. Discover their premium services, innovative designs, and commitment to excellence in hospitality.
Brief About Ventive Hospitality
History of Ventive Hospitality
Ventive Hospitality Company was incorporated as ‘O4U Realty (India) Private Limited’ as a private limited company under the Companies Act, 1956 at Mumbai, Maharashtra and a certificate of incorporation was granted by the Registrar of Companies, Maharashtra, Mumbai on February 12, 2002. The name of Company was changed to ‘ICC Realty (India) Private Limited’ as part of a re- branding exercise, and a fresh certificate of incorporation was issued by the Registrar of Companies, Maharashtra, Mumbai on February 27, 2003. Thereafter, the name of Company was further changed to ‘Ventive Hospitality Private Limited’ again pursuant to a re-branding exercise, and a fresh certificate of incorporation was issued by the Registrar of Companies, Central Processing Centre on July 8, 2024. Our Company was subsequently converted into a public limited company and the name of our Company was changed to ‘Ventive Hospitality Limited’ and a fresh certificate of incorporation dated August 28, 2024 was issued by Registrar of Companies, Central Processing Centre.
Summary of the business of Ventive Hospitality
Ventive Hospitality is a hospitality asset owner primarily focused on luxury offerings across business and leisure segments in India and the Maldives. Ventive Hospitality pro forma revenue and pro forma EBITDA were the highest among listed hospitality asset owners1 in India in FY24, FY23 and FY22. Among listed hospitality companies in India, pro forma revenue was the third highest in each of FY24 and FY23 and second highest for FY22 and pro forma EBITDA was the third highest in FY24 and second highest for each of FY23 and FY22.
Business Verticals of Ventive Hospitality
- Luxury hotels and resorts in India and the Maldives.
Revenue breakup of Ventive Hospitality
(Rs. millions, except %)
| Particulars | FY24 | FY23 | FY22 |
| Pro forma revenue from other hotel servicesincluding banquet income and membership fees | 1,236.06 | 1,151.18 | 839.57 |
| Pro forma revenue from annuity assets | 4,661.03 | 4,161.24 | 3,392.00 |
| Pro forma total income | 19,073.78 | 17,621.87 | 11,976.09 |
| Pro forma EBITDA | 8,697.75 | 7,711.21 | 4,924.34 |
| Pro forma EBITDA Margin (%) | 45.60% | 43.76% | 41.12% |
Subsidiary companies of Ventive Hospitality
- Direct Subsidiaries
- Eon-Hinjewadi Infrastructure Private Limited (“EHIPL”)
- KBJ Hotel & Restaurants Private Limited (“KBJ”)
- UrbanEdge Hotels Private Limited (“UHPL”)
- Novo Themes Properties Private Limited (“NTPPL”)
- Restocraft Hospitality Private Limited (“RHPL”)
- Nagenahira Resorts (Pvt) Limited (“NRPL”)
- Wellcraft Infraprojects Private Limited (“WIPL”)
- Step-down Subsidiaries
- Panchshil Corporate Park Private Limited (“PCPPL”)
- Maldives Property Holdings Private Limited (“MPHPL”)
- SS & L Beach Private Limited (“SS & L”)
Industry Outlook
Major reforms in the hospitality industry:
- Over the last few years, the Government of India has undertaken multiple initiatives to increase hotel and tourism flows: The main elements comprise:
- Electronic Visa (E-visa) scheme made available effective November 2014 has successfully enabled inbound visitors to come in with short lead-time and ensured ease of travel.
- Industry Status: 11 states have granted industry status to hotels, enabling benefits such as industrial rates for energy, water, property tax incentives etc.
- Tourism and Hospitality Skill Development: The government has launched skill development programs to enhance the quality of hospitality services. Government initiatives and training programs aim to provide training and certification to individuals seeking employment in the tourism and hospitality industry.
- Infrastructure Development: The government has focused on developing tourism infrastructure, including the improvement of transportation networks, upgrading airports, and enhancing connectivity to popular tourist destinations. Expansion of airports and air connectivity (300 airports expected in India by 2047, up from over 153 airports currently wherein only 125 airports are currently operational), improvement / expansion of highways and the new Vande Bharat trains are enabling a positive impact by attracting more tourists and increasing demand for accommodation.
- FDI: The government has already permitted 100% FDI in hotels under the automatic route; this has been selectively availed as yet and deeper investments will arise as the profile of projects, portfolio consolidation and secondary transactions arise, creating direct / indirect capital flow into the sector.
Overview of Hotel Industry Demand
India Hotel Demand Drivers
The key demand drivers are briefly described herein:
- Business Travel: This comprises of foreign and domestic visitation for business related purposes. Such travel is either on corporate account or by individual business travellers, visiting primarily business-oriented locations. IT, automobile, banking and financial services, healthcare, manufacturing, consulting, retail etc are the key sectors which drive demand for business travel. Pune is an important hub for IT, automobile and manufacturing sectors, and Bengaluru the leader in iT and ITeS sectors, further bolstered by biotech and defence sector activities.
- Tourism: India is popularly known for its rich cultural heritage, historical sites, diverse landscapes, and vibrant festivals. Growth of domestic and inbound tourism contributes significantly to the demand for hotels.
- Leisure Travel: This travel is discretionary and comprises long / short vacations, staycations at city hotels, weekend stays for recreation and entertainment, leisure attached to a business trip or to a trip for weddings and meetings. Greater affordability and propensity, changing lifestyle, and improved connectivity have materially benefitted hotels with good F&B, recreation and entertainment facilities.
- Weddings and Social demand: This segment comprises destination weddings and other social / celebratory events, as well as substantial use of hotels for weddings and social events for local (non-residential) events. The trend for hosting weddings in city hotels or as destination weddings has grown materially and is gaining further momentum, as it percolates to the mid- market segment as well. Several city hotels attract large residential weddings, akin to destination weddings in leisure centres.
- MICE: Conferences, trade shows, corporate events, and training programs are an important demand source, attracting various sectors. IT, banking and finance, retail, FMCG, pharma and automotive sectors are some of the major demand generators – Pune and Bengaluru are well positioned to further deepen the sizeable current demand from this segment. New convention centres in India have increased the potential for larger international and domestic events. The G20 events from Dec-22 to Sep-23 took international visitors to multiple destinations providing occupancy, rate and revenue boost to hotels. The success of those events creates the potential to host varied delegations with international standard offerings and service.
- Diplomatic Travel: This comprises of government leaders and representatives of other countries, often accompanied by large trade delegations. Besides, diplomats posted to India prefer using upper-tier hotels during the transition period.
- Airline Crew: Helps create a core of demand at hotels, albeit at discounted pricing. Airlines also generate limited demand for layovers.
- Transit Demand: Comprises persons on overnight transits during air or road travel to a domestic or international destination.
- Pilgrim Demand: Chain affiliated inventory and demand at pilgrim centres has materially increased in the past few years. Better quality hotel options have enabled visitors to move away from mediocre independent hotels and other pilgrim facilities.
Each demand segment attracts domestic and foreign travel of varying measures, also dependent upon the hotel and destination character. Demand quantum, profile and rate paying capacity are impacted by seasonality factors which may apply differently to business and leisure hotels – for example, higher rate paying leisure travel predominates in winter; business travel predominates on weekdays and business hotels are more reliant on leisure and other demand on weekends. Wedding groups may pay higher rates than business / leisure travellers, for the same dates / period.
Indian Hospitality Industry – Potential for greater penetration:
Indian cities are substantially under penetrated compared to several global cities, both in terms of absolute hotel inventory and as a ratio vis-a-vis commercial office stock.
Domestic Travel Visits
Domestic travel visits grew at 13.5% CAGR between CY01 – CY19, from 236 mn visits in CY01 to 2.3 bn visits in CY19. Domestic travel numbers for CY22 at 1.7 bn reflects strong recovery of 74.5% of CY19 (pre-COVID). Data for CY23 is not yet released by the government. The domestic sector has become a key demand generator with leisure, recreation, weddings and MICE demand driving weekend and off-season occupancies and enabling hotels and resorts to achieve significantly higher occupancies.
Domestic Spend value on Tourism
With growing household earnings and a median age of 28.2 years in CY23, the spend on tourism is projected to rise to US$ 253 bn in CY27, increasing by 69% from US$ 150 bn spent in CY22 reflecting 11% CAGR (CY22-27). Bengaluru and Pune are among the popular destinations, ranked at 2 and 5 respectively among the top 10 visited destinations within India.
Per McKinsey’s research, India currently is the world’s sixth-largest domestic travel market by spending. Hospitality and tourism sector is expected to grow 1.6 times in CY27 compared to CY22.
Domestic Air Traffic
As at end 2023, India had 153 airports in the country of which 125 were operational. Domestic travel comprises 84% of aircraft movements and 82% of passenger movement at the Indian airports. The domestic passenger movements increased by 44% in 2019 compared to 2016 reflecting CAGR of 13%. This growth was driven by opening of new airports, capacity expansions at existing airports and improved connectivity particularly to cities and towns outsides the main destinations.
Overview of Industry Inventory – Chain Affiliated Hotels Hotel Inventory – Segment Classification
In this section, we provide an overview of inventory and demand size, and inventory composition of the upper-tier hotels (including luxury, upper upscale and upscale hotels) in which Ventive Hospitality has its hotels and projects. Consistent with the reporting pattern across the DRHP, inventory data for pipeline hotels is considered only up to FY27, based on data that was available as of 15 May 2024.
Key Markets comprise the Mumbai Metropolitan Area, Delhi NCR, Bengaluru, Chennai, Hyderabad, Kolkata, Ahmedabad, Pune, Jaipur and Goa. These are the top ten markets in India in terms of hotel room inventory.
Select Markets are markets where Ventive Hospitality has an operating hotel or planned hotel project – Pune, Bengaluru and Varanasi. These hotels of Ventive Portfolio in India are:
Operating: – 8 hotels:
- Two luxury hotels – JW Marriott, Pune and The Ritz Carlton, Pune
- One upper upscale hotel – Marriott Suites, Pune
- Five upscale hotels – Courtyard by Marriott, Pune, DoubleTree by Hilton, Pune, Marriott Aloft Whitefield, Bengaluru, Marriott Aloft ORR, Bengaluru and Oakwood Residences, Pune
Ventive has 64% and 12% share of the luxury and upper upscale rooms inventory respectively in Pune. JW Marriott, Pune is the largest luxury hotel based on the number of keys in Pune and is one of only eight luxury hotels in India with inventory between 400 to 500 keys as at March 31, 2024. It has the largest ballroom among luxury hotels in Western India. The Ritz Carlton Pune is one of only two Ritz Carlton hotels in India, with the largest luxury hotel rooms in Pune.
The several hotels in Pune serve multiple significant micro-markets in the city.
Planned/Under development:–
- Expansion of Marriott Aloft Whitefield, Bengaluru
- Varanasi hotel, under a non-binding MOU with Marriott (for a potential Marriott brand)
In this report, CAGR between a financial year (start year) and another financial year (end year) is calculated from 31 March of the start year to 31 March of the end year, unless a different set of dates is indicated.
The analysis of hotel inventory and demand principally deals with chain-affiliated hotels, i.e. hotels that are either (i) owned and operated by hotel chains, (ii) operated by hotel chains on behalf of other owners or (iii) operated under franchise from hotel chains. For this purpose, all recognised international chains operating in India and domestic hotel chains that are generally considered as operating under common branding have been included; other domestic chains are considered if these have five or more hotels operating at least regionally in India. For clarity, groups with multiple hotels only within one state are not considered unless these are generally regarded as hotel chains by the market. Companies that primarily operate time-share facilities, one-star hotels and hotels under aggregators (such as Oyo, Treebo and FabHotels) are excluded.
CoStar performance data from CY20 includes participating units of the aggregators; to the extent these units provided data for earlier periods, it is included in the performance data available from CoStar for earlier periods.
Classifications: The hotels are segmented into the Luxury and Upper Upscale (Lux-UpperUp) Segment, Upscale Segment, Upper Midscale Segment (Up-Mid), Midscale Segment and Economy Segment. The hotels offer additional facilities such as restaurants, bars, and facilities for meetings and events, varying for each hotel. Each segment will include entry-level hotels in that segment besides hotels that are more fully of segment standards. These industry terms used for classifying, categorising and segmenting hotels are explained below.
- Luxury and Upper Upscale segment typically comprises top tier hotels; in India, these are generally classified as five star, deluxe and luxury hotels. Several brands classify themselves as luxury hotels, based on certain criteria (e.g. room size) without having the service standards and consistent guest profile typically associated with true luxury hotels.
- Upscale segment comprises hotels which are more moderately positioned and priced, generally with smaller room sizes than the luxury and upper upscale hotels. In India, upscale hotels are generally classified as 4 or 5 star hotels (typically carrying entry level 5-star quality).
- Upper Midscale segment comprises full service or select service hotels, typically with lesser public areas and facilities and smaller room sizes, which are more moderately positioned and priced than upscale hotels. In India, these would generally be classified as 4 star and sometimes 3-star hotels.
- Midscale segment typically are 3-star hotels with distinctly moderate room sizes, quality and pricing, and a lower extent of services; domestic brand midscale hotels often offer more services than select service international branded midscale hotels.
- Economy segment are typically 2-star hotels providing functional accommodation and limited services, being focused on price consciousness.
Classification of hotels into the various segments is based on the definition and method adopted by CoStar (for hotels participating with CoStar and followed for data reporting and market comparison by the industry. Segmental classifications are essentially based on the intended positioning and overall rate structure of respective hotel brands; actual standards of individual properties may vary, but adjustment is not made on subjective basis. Hotels considered for our report but which are not participating with CoStar have been classified by us within these segments based on our assessment of positioning of the brand / hotel. If a chain has modified the positioning of a brand, such change would be reflected in current and previous period data.
Other Independent hotels have been excluded due to – (a) lack of sufficiently co-ordinated, reliable and consistent data for independent hotels; (b) increasingly challenged competitiveness of several independent hotels against growing presence of chain-affiliated hotels, (c) longer-term constraints on independent hotel growth as hotel chains grow into second-tier markets and smaller towns; (d) general reluctance of banks to finance large projects unless these have access to suitable chain marketing and management systems. We believe that an analysis based mainly on chain-affiliated hotels (while also competing with any independent hotels in the relevant catchment area) is adequate reflection of the overall market conditions.
In this report Luxury, Upper Upscale and Upscale segments combined are referred as ‘Upper-tier’ segment and Upper Midscale, Midscale and Economy segments combined are referred as ‘Mid-tier’ segment.
Management and Share Holding pattern of Ventive Hospitality
Promoters & Board of Directors
- Promoters are Atul I. Chordia, Atul I. Chordia HUF, Premsagar Infra Realty Private Limited, BRE Asia ICC Holdings Ltd and BREP Asia III India Holding Co VI Pte. Ltd.
Board of directors
| Name | Designation |
| Atul I. Chordia | Chairman and Executive Director |
| Tuhin Parikh | Non-Executive Nominee Director |
| Nipun Sahni | Non-Executive Nominee Director |
| Bharat Khanna | Non-Executive Independent Director |
| Thilan Manjith Wijesinghe | Non-Executive Independent Director |
| Punita Sinha | Non-Executive Independent Director |
Share Holding pattern
| Name of the shareholder | % of Holding |
| Promoters | |
| Premsagar Infra Realty Private Limited | 41.73% |
| Atul I. Chordia | 1.85% |
| Atul I. Chordia HUF | 1.11% |
| BRE Asia ICC Holdings Ltd | 24.97% |
| BREP Asia III India Holding Co VI Pte. Ltd. | 11.25% |
| Sub Total | 80.90% |
| Promoter Group | |
| Meena Chordia | 0.21% |
| Panchshil Hotels Private Limited | 1.72% |
| Balewadi Techpark Private Limited | 4.30% |
| Panchshil Infrastructure Holdings Private Limited | 4.66% |
| Panchshil IT Park Private Limited | 2.33% |
| Sagar Chordia | 0.62% |
| Panchshil Realty and Developers Private Limited | 4.38% |
| Yash Chordia | 0.21% |
| Yashika Chordia | 0.21% |
| BREP Asia SBS ICC Holding (NQ) Ltd. | 0.06% |
| Sub Total | 18.69% |
| Public | 0.41% |
Ventive Hospitality IPO details
| Details | Information |
|---|---|
| IPO Dates | December 20, 2024 – December 24, 2024 |
| Issue Price | ₹610 – ₹643 per share |
| Lot Size | 23 shares |
| Minimum Investment | ₹14,789 for retail investors |
| Total Issue Size | ₹1,600 crore (Fresh issue of 24.9 million shares) |
| Listing Date | December 30, 2024 (BSE, NSE) |
Financial of Ventive Hospitality
Key Performance Indicators of Ventive Hospitality
(₹ in million, unless otherwise specified)
| Particular | Company | Company (Proforma) | ||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | |
| Total income | 4,947.08 | 4,417.54 | 2,375.05 | 19,073.78 | 17,621.87 | 11,976.09 |
| Revenue from operations | 4,779.80 | 4,308.13 | 2,291.70 | 18,420.66 | 16,993.74 | 11,625.70 |
| EBITDA | 3,005.59 | 2,500.92 | 1,245.97 | 8,697.75 | 7,711.21 | 4,924.34 |
| EBITDA margin (%) | 60.75% | 56.61% | 52.46% | 45.60% | 43.76% | 41.12% |
| Profit / (loss) for the period/ year | 1,663.17 | 1,312.73 | 294.31 | -667.46 | 156.75 | -1,461.97 |
| Profit /(loss) margin | 33.62% | 29.72% | 12.39% | -3.50% | 0.89% | -12.21% |
| Net borrowings | 3,416.86 | 3,658.48 | 2,999.90 | 34,071.58 | 33,623.58 | 29,845.70 |
| Net borrowings/ total equity | 1.02 | 2.18 | 1.39 | 0.93 | 0.92 | 0.87 |
Assets & Liabilities of Ventive Hospitality
(₹ in million, unless otherwise specified)
| Particulars | March 31, 2024 | March 31, 2023 | March 31, 2022 |
| ASSETS | |||
| Non-current assets | 6,067.05 | 6,182.45 | 6,537.69 |
| Current assets | 3,452.64 | 1,610.48 | 1,711.46 |
| Total assets | 9,519.69 | 7,792.93 | 8,249.15 |
| EQUITY AND LIABILITIES | |||
| Equity | 3,344.54 | 1,677.72 | 2,150.87 |
| Non-current liabilities | 5,031.23 | 5,151.92 | 4,611.43 |
| Current liabilities | 1,143.92 | 963.29 | 1,486.85 |
| Total EQUITY AND LIABILITIES | 9,519.69 | 7,792.93 | 8,249.15 |
Profit & Loss of Ventive Hospitality
(₹ in million, unless otherwise specified)
| Particular | Company | Company (Proforma) | ||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | |
| Total income | 4,947.08 | 4,417.54 | 2,375.05 | 19,073.78 | 17,621.87 | 11,976.09 |
| EBITDA | 3,005.59 | 2,500.92 | 1,245.97 | 8,697.75 | 7,711.21 | 4,924.34 |
| EBITDA margin (%) | 60.75% | 56.61% | 52.46% | 45.60% | 43.76% | 41.12% |
| Profit / (loss) for the period/ year | 1,663.17 | 1,312.73 | 294.31 | -667.46 | 156.75 | -1,461.97 |
| Profit /(loss) margin | 33.62% | 29.72% | 12.39% | -3.50% | 0.89% | -12.21% |
Cash Flow of Ventive Hospitality
(Rs. millions)
| Particulars | FY24 | FY23 | FY22 |
| Net cash flow generated from operating activities | 2,650.59 | 2,152.22 | 1,288.90 |
| Net cash flow generated from investing activities | (1,981.23) | 108.00 | (408.09) |
| Net cash flow used in financing activities | (570.50) | (2,194.47) | (833.64) |
| Net increase in cash and cash equivalents | 98.86 | 65.74 | 47.17 |
| Cash and cash equivalents at the beginning of the year | 225.39 | 159.65 | 112.48 |
| Cash and cash equivalents at the end of the year | 324.25 | 225.39 | 159.65 |
Capital structure of Ventive Hospitality
(₹ in million, unless otherwise stated)
| Particulars | Pre-Issue as at March 31, 2024 |
| Borrowings | |
| Current borrowings | 132.12 |
| Non-current borrowings | 3,993.96 |
| Total borrowings | 4,126.08 |
| Equity | |
| Equity share capita | 104.44 |
| Other equity | 3,240.10 |
| Total equity | 3,344.54 |
| Total non-current borrowings / Total equity | 1.19 |
| Total borrowings / Total equity | 1.23 |
SWOT ANALYSIS of Ventive Hospitality
Strengths
- Strong Brand Portfolio: Ventive Hospitality owns and operates luxury hotels and resorts in India and the Maldives, including well-known brands like The Leela, ITC Hotels, and Four Seasons.
- Experienced Management Team: The company is backed by Blackstone, which brings extensive experience and resources to the table.
- Premium Services: Ventive Hospitality is known for its high-quality services, innovative designs, and commitment to excellence in hospitality.
- Strategic Locations: The properties are located in prime tourist destinations, attracting both domestic and international guests.
Weaknesses
- High Operational Costs: Maintaining luxury standards and services can lead to high operational costs.
- Dependence on Key Markets: A significant portion of revenue comes from specific markets, making the company vulnerable to regional economic fluctuations.
- Regulatory Risks: Compliance with industry regulations and standards can be challenging and costly.
Opportunities
- Expansion into New Markets: There is potential for expanding services to new geographical areas and industries.
- Technological Advancements: Investing in new technologies can enhance service offerings and improve operational efficiency.
- Strategic Partnerships: Forming alliances with other businesses can enhance service offerings and attract more clients.
Threats
- Intense Competition: The hospitality industry is highly competitive, with many players offering similar services.
- Economic Instability: Economic downturns can affect consumer spending on luxury travel and hospitality services.
- Regulatory Changes: Changes in government policies and regulations can impact operations and increase compliance costs.
Peer Comparison with Ventive Hospitality
(₹ in million, except per share data)
| Particulars | Revenue from operations | EPS (₹) | EPS (₹) | P/E | RoNW (%) | Net Worth | NAV per Equity Share (₹) |
| Ventive Hospitality (Proforma) | 18,420.66 | -5.24 | -5.24 | Negative PE | -1.82% | 36,658.33 | 175.69 |
| Listed Peers | |||||||
| Chalet Hotels Limited | 14,172.52 | 13.54 | 13.53 | 60.06 | 15.03% | 18,508.68 | 90.08 |
| Samhi Hotels Limited | 9,573.93 | -14.67 | -14.67 | – | NA | 10,385.40 | 47.63 |
| Juniper Hotels Limited | 8,176.63 | 1.46 | 1.46 | 264.35 | 0.90% | 26,552.81 | 119.34 |
| The Indian Hotels Company Limited | 67,687.50 | 8.86 | 8.86 | 75.09 | 13.13% | 1,01,287.10 | 71.16 |
| EIH Limited | 25,112.70 | 10.22 | 10.22 | 37.84 | 16.58% | 40,863.60 | 65.34 |
| Lemon Tree Hotels Limited | 10,711.23 | 1.88 | 1.88 | 70.93 | 11.75% | 15,464.28 | 19.52 |
| Apeejay Surrendra Park Hotels Limited | 5,789.70 | 3.82 | 3.82 | 46.31 | 5.74% | 11,977.50 | 56.13 |
Risks in Ventive Hospitality
- Most of Ventive Hospitality hospitality assets are operated by or franchised from Marriott (6 out of 11 operational hospitality assets, which contributed to 31.34% of our pro forma total income for FY24) and Hilton (2 out of 11 operational hospitality assets, which contributed to 19.58% of our pro forma total income for FY24), collectively comprising 8 out of 11 operational hospitality assets, contributing to 78.05% of the keys in hospitality portfolio as at March 31, 2024 and contributing to 50.92% of Ventive Hospitality pro forma total income for FY24. While have entered into long term agreements with such third party operators or franchisors, if these agreements are terminated or not renewed, our business, results of operations, cash flows and financial condition may be adversely affected.
Litigation involved
Gray Market Premium
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