New Delhi/Mumbai: Tata Group backed Indian Hotels Company (IHCL) is set to launch a qualified institutional placement of Rs 2000 crore as the hotel chain braces for business expansion shrugging off the effects of the Covid-19 pandemic. Credit Suisse and ICICI Securities are helping the company raise money, said people familiar with the matter.
IHCL did not immediately respond to a request for comments. The company will raise funds from a group of local and global institutional investors, who will own shares of the company.
In October last year, the company had announced plans to raise upto Rs 2000 crore by way of a way of a rights issue and another Rs 2000 crore through QIP subject to receipt of regulatory approvals. IHCL MD and CEO Puneet Chhatwal had said the board approval of raising equity of Rs 4000 crore would enable the chain to be a zero debt company in the future and will help fund the company’s expansion as well as its capital expenditure plans.
As per an analyst presentation shared in a regulatory filing by the company last month, IHCL plans to open more than one hotel a month between January to December this year. It has a footprint of over 210 hotels in 97 destinations in about 29 states and union territories.
The company signed 17 new hotels between January to December last year and has a pipeline of over 60 hotels. The chain reported consolidated revenues of Rs 1134 crore in quarter three of financial year 2021-2022, up from Rs 615 crore in financial year 2020-2021. It reported a profit after tax of Rs 76 crore in quarter three of financial year 2021-2022, compared to a loss of Rs 119 crore in the corresponding period of the previous fiscal.
Occupancy rates of its domestic leisure properties (excluding the Ginger brand) were around 66% in quarter three of 2021, up from 54% in quarter two of the financial year 2021. Non-leisure occupancies were 67% in quarter three of 2021 up from 58% in quarter two. The company’s occupancies in the US improved from 41% in quarter two to 44% in quarter three of 2021 and from 41% in quarter two to 51% in quarter three of 2021 in the UK as per the analyst presentation.
The highly transmissible third wave and ensuing curbs in India dampened sentiments for the hospitality sector in January and early February this year but bookings seem to be coming back to hotels following a decline in Covid-19 cases.
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