Bharat Hotels, which had delisted in 2003, plans to return to the stock exchanges with Rs 1,000-crore initial public offering (IPO), sources familiar with the development told Moneycontrol.
The issue is likely to comprise only fresh shares. The New Delhi-headquartered company runs all its five-star hotels under ‘The LaLiT’ brand.
SBI Capital Markets, IDFC Bank, HDFC Securities and CSFB are said to be in race for the mandate to handle the IPO process, according to sources.
The company made a profit of Rs 36.69 crore on operating revenues of Rs 574.77 crore.
Bharat Hotels has a rich history, particularly well known to the who’s who of Delhi. It was started by Lalit Suri who was close to late Prime Minister Rajiv Gandhi. After Suri’s death in 2006, his wife Jyotsna Suri took over the hotel chain’s reins as its Chairperson and Managing Director. She runs the company with the help of family members and professionals.
The group has thirteen operational hotels in the five-star deluxe segment with 3,600 rooms. One of them is a property in London. It also has two hotels in the mid segment. The mid segment hotels are operated under the brand ‘The Lalit Traveller’.
A hotel at Ahmedabad is under construction and is likely to be completed by end of next year, according to the company’s 2016-17 annual report.
The group’s first hotel was opened in 1988 at Connaught Place in the heart of the national capital and operated as ‘Holiday Inn’ and ‘Intercontinental’ at various times under licensing arrangements with the foreign owners of the brands before it was named The Lalit in late 2000.
The hotel chain also operates ‘Kitty Su’ brand of night clubs and ‘Baluchi’ restaurants.
The hotel industry is plagued by expensive real estate, high taxation -- 28 percent GST for rooms costing over Rs 7,500 – and low occupancy that rarely goes over 60 percent. With little flexibility to increase room rates, most hotels earn a large part of their income from banquets, according to a hotelier.
Domestic tourism, driven by India’s middle class and increasing disposable incomes, is driving the growth of travel and tourism in the country. As per Ministry of Tourism, domestic tourist visits to the states grew by 15.5 percent annually to 1.65 billion in 2016. Foreign tourist arrivals grew 10.7 percent to reach nearly 9 million in 2016.
As per World Travel and Tourism Council, India is the third largest domestic aviation market with 100 million domestic passengers and growing at over 15 percent annually.
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