Prestige Estates share price is in focus on Tuesday. This followed its announcement of investing up to ₹1,625.04 crore in Prestige Hospitality Ventures Ltd (PHVL) via a rights issue. PHVL is its wholly-owned subsidiary. This will bolster PHVL’s hospitality business.
PHVL’s Financials and Transaction Details
- PHVL’s turnover was ₹4,161 crore for FY 2024.
- PHVL was incorporated in 2017.
- This transaction is a related-party deal.
- It will be conducted at arm’s length.
- Prestige Estates’ promoters have no financial stake.
- The rights issue is set for completion by March 31, 2025.
- Shares will be purchased in cash.
- PHVL’s ownership structure will remain unchanged.
- Prestige Estates will retain full ownership.
Prestige Estates Financial Performance
Prestige Estates faced financial headwinds. The company’s consolidated net profit fell by 84.8% in Q3 FY 2024-25. Revenue declined by 7.9% year-on-year to ₹1,654.50 crore from ₹1,795.80 crore a year ago. However, EBITDA rose by 7% to ₹590.10 crore. Besides, margins improved to 35.7% from 30.7%.
Prestige Estates Share Price Performance
Prestige Estates’ share price closed at ₹1,180 on Friday. This is a 2.16% drop from the previous close on the NSE. The stock has fallen by 36% in the last six months. It has dropped by about 28% since the start of the year. At 2.40 PM, it was trading at ₹1,138.75.
Conclusion
Prestige Estates is investing heavily in its hospitality subsidiary despite recent financial setbacks. As per news reports, the investment will be completed by March 2025. This move aims to strengthen its hospitality business. In the future, the company is expected to maintain full ownership of PHVL.
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