Nandas earmark Rs 1,000 cr for hotel buyouts

Promoters to bring in Rs 450 crore; IPO likely.

The Nanda family, which had acquired The Claridges in New Delhi recently, has put together a war chest of Rs 1,000 crore for more acquisition of hotels in Mumbai and South India as well as to upgrade its existing properties.

As per the plans, about Rs 450 crore would come the present investors in the venture, while the remaining would come as loans as well as funds raised from an initial public offer (IPO).

"The investment will made in the next three years and we plan to have about 1000 rooms across the country by that time," Suresh Nanda, chairman, The Claridges Hotels and Resorts, told Business Standard yesterday.

He also said that the company plans to rope in additional investors in the company as a part of its expansion plans.

The company expects to generate revenues to the tune of Rs 300 crore in the next three years with a profitability of about 40 per cent. The company will look at an IPO at this time.

"The IPO is aimed at raising funds for expansion as well as to give a chance to the existing investors to exit from the venture," Nanda said.

The three South Indian destinations where it wants to set up new hotels are Bangalore, Goa and Kerala. It currently has properties in New Delhi, Mussoorie, Corbett and Nainital.

Besides, as a part of its renovation strategy, the company is also planing a complete overhauling of its Delhi.

"In the long term we plan to rebuild the property in Delhi. We are seeking permissions from authorities for this. It is a 50 year old building which is built on a disconnected way," he said.

For the short term, the Delhi property would be renovated in parts. "We have attained profitability in Delhi. It is not advisable to rebuild it now as it would lead to loss of business," said Nanda, who acquired the property for about Rs 96 crore last year.

The company has invested about Rs 15 crore in the hotel for renovation in the last 12 months and is expected to invest a similar amount in the next 12 months.