Brigade Hotel Ventures is planning is the development of five additional hotels, which will be managed by global hospitality companies. Credit: Monthira/ Shutterstock.

Brigade Hotel Ventures, which owns and develops hotels in South India, has filed the draft papers with the Securities and Exchange Board of India (SEBI), as per the draft red herring prospectus (DRHP), to initiate an initial public offering (IPO) for raising approximately Rs9bn ($107.06m).

The IPO consists solely of fresh equity shares issue, with no offer-for-sale (OFS) component, Press Trust of India reported.

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The company plans to allocate approximately RsR4.81bn of the proceeds towards the repayment of existing debts.

This includes Rs4.12bn for Brigade Hotel Ventures and Rs690m for SRP Prosperita Hotel Ventures, its material subsidiary.

An additional Rs1.075bn is set aside for buying an undivided share of land from Brigade Enterprises (BEL). The remaining funds will be directed towards inorganic growth strategies, such as acquisitions, and other general corporate purposes.

Brigade Hotel Ventures is exploring opportunities for acquiring land parcels in Goa and other regions of South India to develop new properties. The company has so far launched nine hotels, comprising a total of 1,604 keys. 

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It is planning the development of five additional properties, which will be managed by global hospitality companies. These new establishments will come up in Hyderabad, Chennai and Vaikom, along with two in Bengaluru.

Furthermore, Brigade Hotel Ventures may seek to raise up to Rs1.8bn through a pre-IPO placement. If this placement is completed, the sum raised will be deducted from the final IPO issue.

In 2004, real estate developer BEL entered the hospitality sector, by developing its first property, Grand Mercure Bangalore.