Canada’s CPP Investments to invest $315 million in Prestige hotels

Prestige Estates Projects has agreed to bring Canada’s CPP Investments into its hospitality business, with the pension fund manager proposing to invest up to ₹3,000 crore, or about $315 million, for as much as a 28% stake in Prestige Hospitality Ventures Ltd.

The Bengaluru-based developer said in an exchange filing dated Monday, 10 August, that it had signed a binding framework agreement with CPP Investment Board Private Holdings (4) Inc. and Prestige Hospitality Ventures, currently a wholly owned subsidiary.

The transaction is expected to take place in several tranches and will combine a primary investment in the hotel company with a secondary purchase of existing shares.

Prestige and CPP Investments have yet to disclose how the ₹3,000 crore will be divided between the two. The deal is also not yet completed and remains subject to due diligence, definitive agreements and regulatory and lender approvals. Prestige has not given a closing date.

At the maximum figures disclosed, ₹3,000 crore for a 28% holding would point to an implied equity value of ₹10,700 crore, or about $1.12 billion, for the hospitality company.

The agreement gives Prestige another route to monetize a hotel business it has spent more than a year preparing to list.

Prestige Hospitality filed draft papers with the Securities and Exchange Board of India (Sebi) in April 2025 for an initial public offering (IPO) of as much as ₹2,700 crore, about $283 million. The proposed issue comprised ₹1,700 crore of fresh shares and a ₹1,000 crore offer for sale by parent Prestige Estates.

But Prestige had recently begun openly considering private capital instead. On its first-quarter earnings call on 30 July, chairman and managing director Irfan Razack said the company was assessing different ways of monetizing the hospitality portfolio as private-equity investors showed interest.

“We could have done the IPO, which again, we have time till September 30,” Razack told analysts.

Chief financial officer Amit Mor said on the same call that the company would consider alternatives if discussions were finalized, while retaining the option of proceeding with the IPO before its approval window ended on 30 September.

The original IPO plan had a substantial balance-sheet component. Prestige Hospitality proposed using about ₹1,121 crore of the fresh-issue proceeds to repay or prepay borrowings at the company and two material subsidiaries.

The new CPP Investments transaction could provide another source of capital for the business, but Prestige has not disclosed how the primary proceeds from the deal will ultimately be used.

The transaction also comes as Prestige carries significant debt while expanding across residential, commercial and hospitality projects. The company said on its July earnings call that consolidated net debt stood at about ₹11,900 crore, or roughly $1.25 billion, at the end of June, with gross debt of ₹15,000 crore and cash and equivalents of about ₹3,300 crore.

Its hotel operations, meanwhile, have been generating stronger margins. Prestige said its hospitality business produced about ₹300 crore of revenue in the June quarter with an Ebitda margin of about 41% and contributed roughly ₹41.9 crore to the group’s bottom line.

The latest transaction filing separately put Prestige Hospitality Ventures’ standalone revenue for the previous financial year at ₹345.9 crore.

CPP Investments manages the Canada Pension Plan Fund on behalf of more than 22 million contributors and beneficiaries. The fund ended its fiscal year 2026 with net assets of C$793.3 billion, according to CPP Investments.

If completed at the upper end of the disclosed terms, the investment would leave Prestige Estates with a controlling interest of at least 72% in its hospitality subsidiary while adding a large institutional investor to the shareholder register.