Bharat Hotels to invest Rs 1,400 crore

Bharat Hotels Ltd, which operates hotels under brand name 'The Grand', is planning to pump in Rs 1,400 crore (Rs 14 billion) to expand its presence in India by 2008, even as it is mulling an IPO to mop up the funds.

"The company has plans to have presence in Jaipur, Noida, Hyderabad and Amritsar by 2008. We are planning to invest Rs 1,100 crore (rs 11 billion) and another Rs 300 crore (Rs 3 billion) for a possible acquisition of a property in Chennai," Lalit Suri, CMD, Bharat Hotels told PTI.

He said the company was looking at raising funds through debt and equity in order to fund its expansion programme.

"We will adopt a debt-equity ratio of 1:1," he said, adding the company was considering both IPO and private placement routes as options for fund mobilisation.

"The sentiments are in favour of IPO," he said and added that the board would meet tommorrow to take a decision.

On the Chennai plans, he said: "We have interest in Chennai... some negotiations are going on. If it comes through, our investment will go up by Rs 300 crore (Rs 3 billion) to touch Rs 1,400 crore (Rs 14 billion)."

Of the Rs 1,100 crore (Rs 11 billion) initial investment, some funds would also be utilised for the renovation works in 'The Grand Great Eastern', Kolkata, and two ongoing greenfield projects in Bekal and Ahmedabad, which would be completed by 2007.

By 2008, the total hotel rooms will reach 3,158 from the present 2,000. In the phase II of the expansion plans, the company has further plans to start budget hotels in three-star category.

"After we finish the first phase of expansion, we would be entering into the budget-hotels segment that is three star hotels. But for this, we will have some strategic partners," Suri said.

On foraying into overseas market, he said the company was eyeing the markets in the South East and South West Asia.

"We are looking at places like London, Dubai, Sri Lanka and Thailand for making an entry into international markets. But right now the concentration is on India," he said.

On the company's turnover, he said it would touch Rs 300 crore (Rs 3 billion) this fiscal from Rs 200 crore (Rs 2 billion) in 2004-05, adding that net profit would also grow by 100 per cent from Rs 30 crore (Rs 300 million) last year.

The company presently owns 10 five star properties in places like New Delhi, Mumbai, Goa, Srinagar, Bangalore, Udaipur and Khajuraho.