Bharat Hotels IPO on cards

Bharat Hotels has filed its draft red herring prospectus with the Securities and Exchange Board of India (Sebi) for a public issue of 1.2 crore equity shares with a face value of Rs 10 per share.

The issue price is to be determined through a 100 per cent book-building process. The price band for this offer is yet to be determined.

Sixty per cent of the issue will be offered to qualified institutional buyers, 10 per cent to non-institutional investors and the remaining 30 per cent to retail investors. The issue will constitute up to 14.3 per cent of the fully diluted post-issue equity capital of the company.

Kotak Mahindra Capital Co, DSP Merrill Lynch and Deutsche Equities India have been appointed as the book-running lead managers to the issue.

Earlier this month, Lalit Suri, chairman and managing director, Bharat Hotels, had said that he wanted to raise Rs 600 crore from an initial public offering for expanding his five-star luxury brand, The Grand, into Hyderabad, Amritsar, Jaipur, Chandigarh and Noida. Requiring Rs 1,100 crore for these projects, Suri will raise the remaining Rs 500 crore from 1:1 debt equity ratio.

Suri has already identified the sites for these hotels, and the ones at Jaipur and Noida belong to the government. He is also in an advanced stage of negotiation for a property in Chennai.

Speaking on the public issue, Suri said, "We are in an expansion mode due to the buoyancy in the tourism sector."