Canada Pension Plan Investment Board (CPP Investments) has proposed to invest ₹3,000 crore (C$441 million) in Prestige Hospitality Ventures Ltd (PHVL), the hospitality platform of Prestige Estates Projects Ltd (Prestige Group).
The investment will be made in three tranches through a combination of primary infusion and secondary purchase, subject to regulatory and lender approvals, including clearance from the Competition Commission of India.
Investment structured in two components
Prestige Estates will receive ₹950 crore from the sale of equity shares in PHVL to CPP Investments. PHVL will receive ₹2,050 crore through the issue of compulsorily convertible preference shares to CPP Investments.
The primary investment will be made in three tranches of ₹550 crore, ₹750 crore and ₹750 crore. The first tranche is expected to be completed within 60 days, subject to the required approvals.
CPP Investments to acquire 27% stake
Through the proposed transaction, CPP Investments will acquire approximately 27% of PHVL, with the majority of the capital earmarked to support the platform’s continued expansion.
The investment will mark CPP Investments’ first direct investment in India’s hospitality sector. It will also expand its hospitality exposure across the Asia-Pacific region, following investments in Japan and South Korea.
Prestige platform has expansion pipeline
PHVL owns a portfolio of luxury and premium hotels in key gateway cities across India.
The platform has a substantial development pipeline spanning Bengaluru, Chennai, Delhi, Goa, Hyderabad and Mumbai, positioning it for further expansion across major hospitality markets.
Partners target hospitality growth
“Hospitality is an important part of Prestige’s long-term growth strategy, and we see significant opportunity to build a scaled, high-quality portfolio across India. CPP’s long-term investment approach complements our development capabilities and market understanding and together we look forward to creating a hospitality platform of scale,” Prestige Group, Chairman and Managing Director, Irfan Razack, said.
“We see compelling opportunities in India’s hospitality sector, driven by rising travel and a demand for quality accommodation. Prestige has built a strong portfolio of assets across India and benefits from a robust pipeline built up by its established real estate platform,” CPP Investments, Head of Real Estate India and Mumbai Office Head, Hari Krishna, said.
“This investment offers an opportunity to participate in the sector’s long-term growth through a well-positioned platform, while seeking to generate attractive risk-adjusted returns for CPP contributors and beneficiaries,” he said.