Diversified firm Nesco has said it is planning to invest over Rs 2,000 crore in the next five to seven years to foray into the hospitality segment as well as expand its existing IT space offerings and add new exhibition centres.
The company, which is into real estate, exhibition centre, food and beverages (F&B) and engineering businesses, is also planning to set up a convention hall at its Nesco Centre in Goregaon in suburban Mumbai.
"We are strategically expanding our business into newer segments to take advantage of the changing environment. While we will continue to add more exhibition halls, we are also planning to enter the hospitality segment by launching hotels for the convenience of the exhibitors and visitors," company''s chairman Sumant Patel told PTI.
The company, he said, will be investing Rs 2,000 crore over the next five-seven years for entering new verticals and expanding other businesses, which will be completely funded by its internal accruals.
"Our current cash reserves are about Rs 700 crore, which will be used to fund these projects in addition to yearly net inflows from our various business over the next five-seven years," Patel added.
As part of this strategy, the company plans to build its third IT building of nearly 40 lakh sq ft along with a four-star business hotel.
"We have two operational IT buildings and we are in the process of getting the approvals for the third one and plan to start the construction by 2021. The estimated budget for the project is Rs 1,800 crore for total 46 lakh sq ft of development, which will include office space, amenities, F&B area as well a 300 room four-star business hotel," Patel added.
The company plans to add two more exhibition centres and a convention hall at the Nesco centre.
"Currently, we have about 5.78 lakh sq ft of exhibition space in Nesco Centre and we are planning to build a new hall of about 1.45 lakh sq ft. We are also in the process of replacing two of our existing halls with new convention centre and exhibition halls. We will set up at least one more hotel in the premises," he said.
It may be noted that the city civic body BMC has converted Nesco''s exhibition centre into a fully equipped COVID-19 facility.
"Though COVID-19 has impacted the economic activities, we are expecting the situation to improve in the second half of the fiscal and there will be demand for exhibition centres from domestic as well as international exhibitors. The expansion plans are undertaken to meet the future demand," Patel added.
The company reported a 35.73 percent increase in net profit for the quarter ended June 30 at Rs 51.35 crore, as against Rs 37.83 crore in the corresponding period last fiscal.
Its total revenues for the quarter increased to Rs 91.35 crore from Rs 79.53 crore in Q1 FY2020.