The Hindu Business Line : ICICI Pru invests Rs 62 cr in Sabari Inn

Funding expansion: (From left) Mr Yesh Nadkarni, Head- Real Estate Investment Management, ICICI Prudential Asset Management Company Ltd, Mr K.R.V. Ramani, Chairman and Managing Director, Sabari Inn Pvt Ltd, Mr Ramesh Shiva, Vice-President (Operations), at a press conference in Chennai on Wednesday.

Our Bureau

Chennai, Jan. 9 ICICI Prudential PMS Real Estate Securities Fund has taken Rs 62-crore equity exposure in the Chennai-based Sabari Inn Pvt Ltd to fund the latter’s Rs 250-crore expansion project, phase-I. The Fund has also indicated willingness to bring in “substantial investments” for the next phase of expansion too.

Announcing this at a press conference here on Wednesday, Mr K.R.V. Ramani, Chairman and Managing Director of Sabari Inn Pvt Ltd, said the company plans to have at least 15 hotels by 2011-12.

It currently has two four-star properties in Chennai — 70-room Quality Inn Sabari in T Nagar and 90-room Quality Hotel Sabari Classic on Old Mahabalipuram Road (OMR), which the company soft-launched a couple of months ago.

In the first phase of expansion, Sabari Inn will add five new properties. It has already acquired land in Pune, Bangalore, Coimbatore and Munnar and is close to buying land in Hyderabad. The new hotels will be in the four-star, “value-for-money” category with 100 to 120 rooms, and will be up and running within 18 months from now.

Commenting on the investment, Mr Yesh Nadkarni, Head-Real Estate Investment Management, PMS at ICICI Prudential, said the institution is bullish on the country’s hospitality sector, particularly in the 3-star and 4-star categories, where Sabari’s properties are positioned, targeting mid-level corporate executives. This is the first equity investment for the fund, which has Rs 800 crore under its management. “We have lined up two more investments of the size of Rs 150 crore in various sectors, which will be announced soon,” said Mr Nadkarni. He said the fund would stay invested for about four years and “IPO will be an option to exit”.

For its second phase of expansion, Sabari Inn is on the look out for land in places including Kochi, Goa, Visakhapatnam, Mangalore and Mysore. “We have also identified a property in Sriperumbudur for our project in the second phase,” Mr Ramani said.

Sabari Inn registered a net profit of Rs 1.82 crore on a turnover of Rs 12.56 crore for the year 2006-07. This is only from one hotel (T.Nagar), the second was launched only a few months ago.

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