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Our Bureau

Mumbai , May 20

BHARAT Hotels, owners of the Grand Group of Hotels, plans to add seven five-star hotels in the country over the next three years at an investment of Rs 1,000 crore.

The group is also keen to foray into the budget hotel segment at a later stage.

Mr Lalit Suri, Chairman and Managing Director, Bharat Hotels Ltd, said the group expects to finalise the details of the seven luxury hotel projects over the next six months.

The new projects are planned at Amritsar, Ahmedabad, Bangalore, Chennai, Hyderabad, Bekal (Kerala), and Jaipur. The group currently owns five-star hotels under the `Grand' brandname at New Delhi, Mumbai, Goa, Srinagar, Bangalore, Udaipur, and Khajuraho.

The group is keen to enter into sales and marketing tie-ups for its new properties while keeping management to itself.

According to Mr Suri, the group would use a mix of funding options including internal accruals, borrowings and private placement of equity with venture capital funds to finance the projects.

While it plans to raise Rs 250 crore in loans, it hopes to pump in Rs 300 crore from internal accruals over the next three years.

The group achieved a gross profit of Rs 77 crore on a turnover of Rs 200 crore in 2004-05 and is targeting a turnover of Rs 300 crore in the current fiscal, he said.

It plans to privately place 10-15 per cent equity with venture capitalists following which the promoter shareholding in the company will come down by about 10 per cent. Currently, the promoters hold directly and indirectly about 98 per cent equity in the company whose capital base is at Rs 72 crore.

Mr Suri added that the company might come out with an IPO in the next two years.

During this period, it also plans international forays in Dubai, London, and New York. While the Dubai project will be a greenfield one, the group plans to buy properties in London and New York. However, Mr Suri declined to comment on the exact investment planned. "We are looking for the right property at the right price," he said.

The foray into the budget category, he said, would follow the expansion of the luxury chain. Key to expansion in this sector would be the availability of land at reasonable rates.

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