The Hindu Business Line : Eros Group to draw up Rs 5,000-cr fund

Delhi based Eros Group is drawing up a corpus of Rs 5,000 crore in association with international funds and private equity investors to expand its hospitality business. The fund would be utilised for the construction of 8-10 hotels, some in the 5-star category with others in the 3-star and 4-star categories.

"We are talking to a few international funds and private equity players. The international players will invest in the hotels on a project-to-project basis where we may decide to invest 60 per cent of the equity," Mr Avnish Sood, Director Eros Group, told Business Line. The corpus would be ready by the middle of 2007. However, Mr Sood declined to give the names of the funds and private equity players that he is talking to.

Hotels Construction

While the 5-stars hotels will come up in metros, the other hotels will be constructed in tier-2 cities. "We are looking at Chennai, Bangalore and Kolkata for the 5-star hotels," said Mr Sood. The construction of the hotels will begin in the next 1-2 years and they will be operational by 2009-2010. The company will keep the rentals at around Rs 2,000 per night for the 3-star hotels and Rs 4,500-5,000 per night for the 4-star hotels.

Eros has a land bank of around 700 acres in Delhi NCR, which it plans to develop for plots and group housing, townships and built up villas. It is also acquiring 100 acres of land in Chandigarh for plotted development and group housing complexes.

The company's turnover stood at around Rs 500 crore from the real estate business at the end of March 2006 and it expects it to grow to Rs 1,000-1,200 crore in the current fiscal.

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