Baljee Group looks beyond its base

Baljee Group, a Bangalore-based hospitality chain since 1973, is planning a Rs 200 crore expansion which will see the group moving into other cities. The group is planning an initial public offer to part-fund the expansion.

"For the expansion, the group has set a budget of Rs 200 crore and is eyeing properties in Pune, Mumbai, Hyderabad, Chennai and Delhi to set up hotels," Chander Baljee, managing director, Baljee Group told Business Standard.

The group is planning to use 'Royal Orchid' brand for its hotels and is exploring a mix of management contract, lease of properties, joint ventures or revenue sharing in the cities it plans to enter.

The group presently operates four hotels - Royal Orchid (five star), Central Park (four star) and Harsha (three star) in Bangalore and Hotel Metropole (heritage hotel) in Mysore.

The group has also extended its hospitality expertise and solutions to Food Factory, a catering company supplying 'packaged meals' to a host of IT and BPO multinationals.

For setting up more hotels, the company is using its internal accruals and is also exploring the possibilities of an initial public offer (IPO) to raise funds, said Chander Baljee.

Declining to mention the size of the IPO, he said the company has appointed Allegro as advisors to the issue and has selected Grant Thornton as international auditors. The group is in the process of finalising merchant bankers.

With Bangalore riding a boom in hospitality business, the group's profit-after-tax has grown appreciably to Rs 58 crore in 2004-05 from Rs 36 crore in 2003-04.

"The group was able to perform well due to various reasons including cost control, properties having been fitted with the needs of today's business traveller, attaining 100 per cent occupancy which is backed by utilisation of boardrooms and function rooms," said Chander Baljee.