Fri Dec 20 11:54:24 UTC 2024: ## Ventive Hospitality IPO Receives Tepid Response on Day 1

**MUMBAI, INDIA** – The initial public offering (IPO) of Ventive Hospitality Ltd., backed by Blackstone, opened to a muted response on its first day of bidding. As of 2:33 p.m., the IPO was subscribed only 0.67 times, indicating a less-than-enthusiastic reception from investors.

The IPO, which consists entirely of a fresh issue worth ₹1,600 crore (approximately $194 million USD), is priced between ₹610 and ₹643 per share. However, the grey market premium (GMP) suggests a potential listing price of ₹710, a 10.42% gain over the upper price band. It’s important to note that GMP is based on speculation and not an official price quote.

Ventive Hospitality, a joint venture between Panchshil Realty (60% stake) and Blackstone (40%), operates 11 luxury hotels in India and the Maldives, boasting a total of 2,036 keys. The company reported a 27% increase in net profit to ₹166 crore in the last financial year, with revenue up 11% to ₹478 crore.

Proceeds from the IPO will primarily be used to repay debt (₹1,400 crore). Ventive Hospitality plans to expand its portfolio through organic and inorganic growth, targeting new locations such as Varanasi, Bengaluru, and Sri Lanka. They also aim to increase their key count to 2,403 by FY2028.

Despite the positive financial figures, the IPO’s underperformance highlights investor concerns. These concerns include the company’s reliance on third-party operators like Marriott and Hilton, potential risks associated with geographical diversification (especially in the Maldives), and the relatively high other expenses reported in the first half of the year. Furthermore, the company lacks a consolidated operating history, having reported losses on a pro forma basis in FY2022 and FY2024.

Subscription breakdown reveals a mixed bag: Qualified Institutional Buyers (QIBs) subscribed 1.05 times, while Non-Institutional Investors and Retail Investors showed considerably lower interest at 0.06 times and 0.45 times respectively. Employee subscriptions fared better at 1.30 times.

Potential investors are advised to carefully review the red herring prospectus and seek professional financial advice before investing in the IPO, given the inherent market risks involved.

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