Tata group’s Indian Hotels Company Ltd (IHCL), along with Singapore’s sovereign wealth fund GIC, has set up a ₹4,000-crore investment platform to acquire fully operational hotels in the luxury and upscale segments in India over the next three years.

IHCL will adopt an asset-light model to pursue the acquisitions with an equity contribution of 30 per cent. The balance 70 per cent will be contributed by GIC.

Puneet Chhatwal, Managing Director and Chief Executive Officer, IHCL, said: “We are delighted to partner with GIC, one of the most reputable global investors. This collaboration is in line with Aspiration 2022 and our vision to scale up. Through this platform, we expect to acquire strategic and marquee assets that need new ownership, branding and positioning.”

Key markets

According to an IHCL press statement, the platform will look at potential assets primarily located in key lodging markets in the country. The mandate is to acquire fully operational hotels which will also include distressed or under-performing properties that can be turned around leveraging IHCL’s capabilities.

The Aspiration 2022 strategy was unveiled in 2018, under which Indian Hotels is seeking to improve its EBITA margins from 17 per cent in 2018 to 25 per cent by 2022.

It also wants to improve the revenue per available room (RevPAR) in the domestic market and bring it on a par with 2007-08 levels, when it was at its peak. This was being done through a three-pronged strategy of ‘Re-structuring, Re-engineering and Re-imaging’ the portfolio, Chhatwal had said last year.

Having reduced its debt levels, the 115-year-old company is planning to further monetise its land parcels, properties and other non-core assets to drive its profit margins. Adopting a ‘one IHCL and one Tata’ strategy, the hotel chain had said earlier that it plans to increase its room count from 16,000 to 24,000 by 2022 under brands such as Taj, Vivanta and Ginger.

 

 

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