Kamat Hotels to raise $20 m via ECBs to fund spread

Kamat Hotels India, the owner of Mumbai-based Orchid Hotel, is planning to raise $20 million from the overseas markets through external commercial borrowings (ECB). The company will raise the capital to fund its immediate expansion plans.

"Market situation is ideal for an ECB route. However, we might even give a second thought for a fresh public issue. The board will soon meet to approve the plan," said Vittal Kamat, chairman and managing director, Kamat Hotels India.

The group is developing heritage hotels around structures such as forts and palaces across the country.

"For the first time in the country KHIL will develop three star hotels - branded Kamhotels - on forts like Jadhavgarh, Amboli and Sawantwadi in Maharashtra. We will be expanding the hotel chain across other states of the country. These hotels will have 120 rooms with an average room rate of Rs 2,000," said Kamat.

According to him, India holds a tremendous potential in the area of heritage and culture tourism. A budget hotel developed around a heritage structure will attract the middle class, he said.

"In the next three years, 35 per cent of Indians will own vehicles enhancing their mobility. The commutation will grow ten fold then from what is seen today. In such a scenario, the demand for budget hotels with a clean kitchen, bed and toilet will grow," he said.

Over 40 crore domestic tourists visited India in 2005, growing at 25 per cent every year.

Over 39.2 lakh tourists visited India during the period, a 19 per cent increase over the estimates in the previous year.