Mumbai, Dec. 7
SAROVAR Hotels & Resorts today said it has raised Rs 38 crore from two global private equity funds to part finance its new budget hotel brand, Hometel.
Bessemer Venture Partners Trust (an affiliate of Bessemer Venture Partners) and New Vernon Private Equity Ltd have made equal investments in the project.
Mr Anil Madhok, Managing Director, Sarovar Hotels, said the funding would help the group rapidly expand its Hometel brand. The first Hometel would open in Bangalore in January 2006, with work on four others (at Hyderabad, Jaipur, Mumbai, and Pune) currently under way.
Sarovar Hotels would invest Rs 200 crore to roll out 50 Hometels over the next five years. Besides the equity funding it has already received, the group would tap internal accruals and bank borrowings, Mr Madhok said at a press meet here today.
The equity funding would also help the group build and own its properties. It would consider other funding options such as strategic partnership and entering the market to fund future expansion, he said.
The group, which was earlier called Sarovar Park Plaza, would focus on the budget segment but also continue to grow its other brands. It currently manages 35 hotels and resorts under the Sarovar Premiere, Sarovar Portico, Park Plaza and Park Inn brands.
Mr Ajay Bakaya, Executive Director, Sarovar Hotels, said the project cost was pegged at Rs 10 crore for a 100-room property, exclusive of land costs.
The room rent would range from Rs 1,500 to Rs 2,500. Hometel, he said, would target smaller towns such as Thiruvananthapuram, Ludhiana, Noida, and Gurgaon for expansion.