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Prestige Estates Projects said on Friday it will raise 50 billion rupees ($598.6 million) by issuing shares to institutional investors.

The Indian real estate developer added its board has approved the monetization of its hospitality assets through a share issue and has formed a sub-committee to oversee the process.

"The monetizing bid largely means that Prestige will seek greater value for its hospitality business and will likely go for an initial public offering," said Karan Khanna, a research analyst at Ambit Capital.

The Bengaluru-based firm has been working on hiving off and listing its hospitality business, which operates 10 hotels in Bengaluru and Kochi, including JW Marriott and Sheraton Grand.

Prestige Estates had flagged the need to raise capital in May.

Sustained travel demand and successful listings of hotel firms, such as Samhi Hotels and Juniper Hotels, have inspired investor confidence in the sector, with consumer giant ITC also looking to carve out its hotel business.

Prestige Estates tapped JM Financial, JP Morgan and CLSA as bankers for the listing of its hospitality business, local broadcaster CNBC TV18 had reported earlier this month.

The company's shares closed 1.5% lower on Friday.

($1 = 83.5240 Indian rupees)