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What is the story about?
Shares of Prestige Estates Projects Ltd. will be in focus on Monday, September 28, after the real estate developer's hotel arm withdrew its draft IPO papers, citing strategic considerations and uncertain market conditions.
In April 2025, Prestige Estates' subsidiary Prestige Hospitality Ventures Ltd. (PHVL) had filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO). The company had planned to raise up to ₹2,700 crore through the public issue.
In a regulatory filing on Friday, September 25, Prestige Estates said its board had decided to withdraw the DRHP due to "strategic considerations and uncertain market conditions".
However, PHVL may consider filing a fresh DRHP with Sebi in the future, subject to suitable market conditions, requisite approvals and other considerations.
The development comes shortly after Prestige Estates announced a potential investment of up to ₹3,000 crore in PHVL by Canada-based investment firm Canada Pension Plan Investment Board (CPPIB).
In August, Prestige Estates said it had entered into a binding framework agreement with CPP Investment Board Pvt Holdings Inc. Under the agreement, CPPIB proposed to invest up to ₹3,000 crore in PHVL in multiple tranches.
FY27 pre-sales guidance intact
Morgan Stanley has an ‘Overweight’ rating on Prestige Estates Projects Ltd. with a price target of ₹2,050 per share.
The brokerage has retained its FY27 pre-sales guidance of ₹35,000-36,000 crore, implying 15-20% year-on-year growth. The guidance is supported by a ₹60,000 crore launch pipeline.
Only around ₹15,000 crore worth of projects were launched in the first half of FY27, with the bulk of the pipeline expected to come on stream in Q3 and some launches in Q4.
Morgan Stanley expects Q2 FY27 pre-sales to be broadly similar to Q1 FY27 at ₹6,570 crore, implying around 9% year-on-year growth.
The brokerage has also maintained its FY27 collections target at ₹24,000 crore, up 11% year-on-year. Residential collections are expected to account for ₹22,000 crore, representing 19% year-on-year growth.
Operating cash flow is estimated at ₹8,500-9,000 crore, including around ₹7,000 crore from residential projects, representing 20-25% year-on-year growth after accounting for the landowner share of 8-9%.
Net debt-to-equity, currently at 0.69 times, is expected to moderate as rental assets begin contributing to cash flows. Morgan Stanley also expects hotel monetisation to support deleveraging, with 28% of the hotel asset already sold to CPP Investments for ₹3,000 crore. The brokerage said that Prestige also has strong access to institutional capital.
Bengaluru-based Prestige Estates is a real estate developer with a portfolio spanning residential, office, retail and hospitality projects across major Indian cities.
Prestige Estates shares ended 0.02% lower at ₹1,474.70 on Friday. The stock has declined around 8% so far this year.
In April 2025, Prestige Estates' subsidiary Prestige Hospitality Ventures Ltd. (PHVL) had filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO). The company had planned to raise up to ₹2,700 crore through the public issue.
In a regulatory filing on Friday, September 25, Prestige Estates said its board had decided to withdraw the DRHP due to "strategic considerations and uncertain market conditions".
However, PHVL may consider filing a fresh DRHP with Sebi in the future, subject to suitable market conditions, requisite approvals and other considerations.
The development comes shortly after Prestige Estates announced a potential investment of up to ₹3,000 crore in PHVL by Canada-based investment firm Canada Pension Plan Investment Board (CPPIB).
In August, Prestige Estates said it had entered into a binding framework agreement with CPP Investment Board Pvt Holdings Inc. Under the agreement, CPPIB proposed to invest up to ₹3,000 crore in PHVL in multiple tranches.
FY27 pre-sales guidance intact
Morgan Stanley has an ‘Overweight’ rating on Prestige Estates Projects Ltd. with a price target of ₹2,050 per share.
The brokerage has retained its FY27 pre-sales guidance of ₹35,000-36,000 crore, implying 15-20% year-on-year growth. The guidance is supported by a ₹60,000 crore launch pipeline.
Only around ₹15,000 crore worth of projects were launched in the first half of FY27, with the bulk of the pipeline expected to come on stream in Q3 and some launches in Q4.
Morgan Stanley expects Q2 FY27 pre-sales to be broadly similar to Q1 FY27 at ₹6,570 crore, implying around 9% year-on-year growth.
The brokerage has also maintained its FY27 collections target at ₹24,000 crore, up 11% year-on-year. Residential collections are expected to account for ₹22,000 crore, representing 19% year-on-year growth.
Operating cash flow is estimated at ₹8,500-9,000 crore, including around ₹7,000 crore from residential projects, representing 20-25% year-on-year growth after accounting for the landowner share of 8-9%.
Net debt-to-equity, currently at 0.69 times, is expected to moderate as rental assets begin contributing to cash flows. Morgan Stanley also expects hotel monetisation to support deleveraging, with 28% of the hotel asset already sold to CPP Investments for ₹3,000 crore. The brokerage said that Prestige also has strong access to institutional capital.
Bengaluru-based Prestige Estates is a real estate developer with a portfolio spanning residential, office, retail and hospitality projects across major Indian cities.
Prestige Estates shares ended 0.02% lower at ₹1,474.70 on Friday. The stock has declined around 8% so far this year.
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