Indian Hotels to open 21 new hotels this year, raise Rs 1,500 crore via rights issue

Tata Group-promoted Indian Hotels, the country’s oldest hotel company, is planning to raise Rs 1,500 crore through a rights issue and open 10 new luxury properties under Taj and 11 hotels under Ginger brand.

The rights issue will meet long term financing needs for capital expenditure, growth plans and debt payments of the company. The company, which decided to do away with its two brands -- Vivanta by Taj and Gateway -- will focus on domestic operations to improve bottom line performance.

“The focus will largely remain for the Indian subcontinent, judicious use of assets both in terms of asset light model and selective capital expenditure. With our strategy in place we will grow our footprint over the next two years. It will open 10 new properties under the Taj brand and 11 new under the Ginger brand. This will result in net addition of 1883 keys to our portfolio,” chairman Natrajan Chandrasekaran said while speaking to shareholders at the 116^th annual general meeting (AGM) of the company.

At a consolidated level, the company posted a loss of Rs 63.2 crore during last year, a reduction of 73 percent compared to 2015-16 when the company posted a loss of Rs 231 crore.

As on March 31, 2017, the total debt of the company was Rs 2,049 crore, including NCDs of Rs 1,783 crore. Of the foregoing, debt of Rs 556 crore is maturing this year.

The company proposes to raise NCDs of up to Rs 500 crore to repay the debt maturing in the current year, fund capital expenditure and make investments in its wholly owned subsidiaries. Over the next five years, the company plans to invest Rs 3,000 crore as capital expenditure, including Rs 300 crore this year.

The worldwide inventory of the Taj Group of Hotels now stands at 134 hotels with 16,675 rooms. The Group's portfolio also includes 35 hotels under the Ginger brand, which has an aggregate inventory of 3,324 rooms.

Chandrasekaran also mentioned that IHCL will participate ‘actively’ in the upcoming Taj Mansingh auction to be conducted by the New Delhi Municipal Council (NDMC).

“In April 2017 the honourable Supreme Court permitted NDMC to conducted auction of the Taj Mansingh, New Delhi. The terms and conditions of the auction are awaited. Your company intends to actively participate in the auction of the hotel”, said Chandrasekaran.

According to Chandrasekaran, Indian Hotels has made some progress on securing approvals for project Sea Rock in Mumbai which has failed to take off over the past several years.

“On Sea Rock we continue to make progress on the various approvals that are required in fact we have made very good progress. In parallel we are engaged with appointing the architects so that we can get on with the design. We are hopeful to get the environment approval soon”, added Chandrasekaran.