The Hindu Business Line : Royal Orchid Hotels on expansion mode

Mr Chender Baljee, Managing Director, Royal Orchid Hotels, told Business Line it had entered Pune with a management contract of the Royal Orchid Golden suites, a 72 all-suite hotel at Kalyani Nagar in April last.The second one, a business hotel, would be launched next month, again at Kalyani Nagar. It would be called Royal Orchid Central and would be part of the national chain of business hotels, along with existing one in Jaipur and Bangalore and an upcoming one in Hyderabad.

With the opening of the Royal Orchid Central in Pune, it would have 10 operational hotels — Bangalore (four), Mysore (two), Hyderabad and Jaipur one each and Pune two.

The projects are funded through a combination of debt and equity and the Pune project has utilised some of the IPO funds as well as internal accruals to account for the equity component.

On the other offerings of the Group, Mr Baljee said it is currently operating business hotels around the country in the four- and five-star category and two heritage hotels catering to the leisure segment.

“We have also made a foray into the budget hotels now and are looking to consolidate our presence in various categories of hotels and expand our presence in each of these categories across India,” he added.

It may be recalled that the company had entered the market with an IPO in January 2006 raising Rs 102-122 crore for its expansion plans. The initial public offering was made through a 100-per cent book building process. Post-issue, the promoters’ holding came down to 67.8 per cent from 91 per cent (including an eight per cent investment by West Bridge Ventures II Investment Holdings). The chain ended the fiscal 2007 with net sales of Rs 8,113.99 lakh as against Rs 5,924.86 lakh (March 2006).

The Royal Orchid group has hotels under three categories: those owned directly by the Royal Orchid Hotels Ltd and its subsidiaries; hotels owned by associate companies and hotels on management contract from third party owners.

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