Appu Hotels Ltd, which owns two five-star hotels -- Hotel Le Royal Meridien in Chennai and Le Meridien in Coimbatore -- is planning for an initial public offering (IPO) to support its Rs 500-crore expansion plan. The company is planning to come out with an IPO by the end of next year.
Palani G Periasamy, chairman, Le Royal Meridien, said the company was planning to double its capacity in the five-star category from the current 500 rooms, with an outlay of around Rs 500 crore over the next two years. The company is planning to set up three more five-star hotels, including a second property in Chennai and two in other parts of the state.
Earlier, he told Business Standard that the company was working on launching a five-star hotel in Puducherry and a resort hotel with 100 rooms on the East Coast road near Chennai.
The proposed investment will be funded through debt, internal accruals and from the proceedings from the proposed IPO. "The value of the IPO will be finalised by merchant bankers soon," he said.
On the industry, he said future growth of hospitality sector would be in the Tier 2 cities in the state and the company plans to open two of its three upcoming projects in such areas. The company would cater to both foreign and domestic customers with international quality of services in these region, he added.
The company launched its second five-star hotel in Tamil Nadu under the brand Le Meridien, at Coimbatore on December 12, 2010. The hotel, with 255 rooms on an area of six acres, has been set up with an investment of Rs 350 crore.
With the industrial growth in Comibatore and nearby region, the company expects foreign and Indian businessmen to occupy space. Further, it is also designed as a resort to attract tourists for leisure activities, said Periasamy.
The Rs 1,250-crore Appu Hotels Ltd is a part of PGP group which has diversified business activities including property and infrastructure development, educational institutions and sugar and chemicals business.
