Pride Hotels Limited IPO

01At a glance

What the company does — owns, leases and manages hotels under the Pride Plaza, Pride Premier, Pride Elite and Biznotel by Pride brands: 34 hotels with 2,723 rooms, of which seven owned hotels have 1,136 rooms and 27 managed hotels 1,587 rooms (DRHP p.30). It opened its first hotel in Pune in 1987 and began management contracts in 2008 (DRHP p.30).

Who pays it — business, leisure and pilgrimage travellers and corporate accounts, which gave about 33.21% of FY25 room revenue (DRHP p.37). Room revenue from the seven owned hotels was 64.63% of FY25 revenue, and a large portion comes from the Delhi hotel (DRHP p.37).

Why it is raising money — ₹1,596.83 million to renovate existing hotels, ₹400.00 million to repay borrowings, and the rest for general purposes (DRHP p.31).

How fast it has grown — revenue from ₹2,462 million in FY23 to ₹2,700 million in FY24 and ₹3,056 million in FY25 (DRHP p.35).

The one thing to understand — a profitable owned-hotel core with a growing managed network. EBITDA was 47.07% of total income in FY25 and net debt only ₹277.77 million, but the owned hotels, one of them in particular, carry the business (DRHP p.37, DRHP p.189).

02The business, in plain words

A hotel company earns room, food and banquet revenue at the hotels it owns, and fees for running hotels that others own. The offer funds renovation of owned hotels (DRHP p.31).

A company books rooms and a conference hall at a Pride hotel in Delhi for a dealers' meet → Pride sells the rooms at its negotiated corporate rate and caters the event → it collects room and banquet revenue. At a managed Biznotel, the owner keeps the revenue and pays Pride a fee.

Food and beverage was 28.44% of FY25 revenue (DRHP p.189).

Earnings equation: Profit ≈ rooms × occupancy × average rate + F&B + management fees − staff, energy and upkeep cost. RevPAR was ₹4,757.54 in FY25 (DRHP p.189).

03Where the money comes from

Source: DRHP p.189.

04The growth record

Source: DRHP p.35, DRHP p.189, DRHP p.390. EBITDA margin is measured on total income: 38.97%, 46.85% and 47.07% (DRHP p.189).

05What the growth is made of

Room rates. Average daily rate rose 25% from FY23 to FY25 while occupancy was about the same, lifting RevPAR 25% (our arithmetic, DRHP p.189). Profit more than doubled as costs grew more slowly than revenue (DRHP p.189, DRHP p.390).

06Earnings quality

Cash has matched profit: operating cash flow of ₹2,969.85 million over FY23 to FY25 against ₹1,871.98 million of profit (our arithmetic, DRHP p.35, DRHP p.390). The auditor noted it could not confirm that audit trails were enabled at the database level of third-party accounting software (DRHP p.36).

07The balance sheet

Source: DRHP p.35, DRHP p.189.

Contingent liabilities at March 2025 were ₹266.53 million, including ₹201.67 million of property tax on the Delhi hotel, which the company is appealing (DRHP p.38).

08What the money is for

Source: DRHP p.31.

09Who is selling

Source: DRHP p.30, DRHP p.31. The last row is our arithmetic from the total of 39,239,446 (DRHP p.1).

10Promoters

The promoters are Sureshchand Premchand Jain, Satyen Suresh Jain, Meena Sureshchand Jain, A.S.P. Enterprises, Kopra Estate, Pride Plaza (I) and The Executive Inn (DRHP p.30).

11Who already owns it

Source: DRHP p.32, DRHP p.33. The last row is our arithmetic.

12What changed just before the IPO

• Hotels — up from 18 in FY23 to 31 in FY25, mostly managed (DRHP p.189).
• Debt — net debt cut to ₹277.77 million (DRHP p.189).
• Rates — average daily rate up to ₹6,569 (DRHP p.189).

13Capacity and expansion

Seven owned hotels with 1,136 rooms and 27 managed hotels with 1,587 rooms (DRHP p.30). The proceeds fund renovation of existing hotels, not new ones (DRHP p.31).

14Market size and industry structure

The Horwath report cited in the offer document estimates India's hospitality market at USD 32 billion in 2023 and projects USD 57 billion by 2028 (DRHP p.30). Those projections are Horwath's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Four sub-brands across upscale to midscale (DRHP p.30).
• Asset-light growth through management contracts since 2008 (DRHP p.30).

Against that: dependence on seven owned hotels and the Delhi property, on corporate accounts and banquets, and on third-party owners who can end contracts (DRHP p.37).

16Peers the company named

The document gives the listed peers' P/E range as 19.85 to 212.97, average 67.62 (DRHP p.187). The peer names were not read for this study.

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Owned hotels. Two-thirds of revenue (DRHP p.37).
• Delhi. A large share from one hotel (DRHP p.37).
• Corporate demand. A third of room revenue (DRHP p.37).
• Managed contracts. Owners may end or not renew them (DRHP p.37).
• Renovation. Delays could cut revenue (DRHP p.37).

18Litigation and regulatory matters

Source: DRHP p.36.

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• What share of revenue the Delhi hotel provides, in the pages read.
• Which hotels will be renovated, and for how long they will lose rooms, in the pages read.
• Why promoter-group finance companies hold shares, in the pages read.
• Management-fee income from the managed portfolio, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. How much of revenue and profit comes from the Delhi hotel?
2. Which hotels will close rooms for renovation, and for how long?
3. How much does the managed portfolio earn in fees?
4. What is the Delhi property-tax dispute about?
5. Why are fifteen holders selling at once?

1Sources and cited facts

This study was read from 1 document the company filed. The 29 figures it cites are listed under the document each came from, with the page and the sentence as printed.