MUMBAI: With the focus on domestic market, Indian Hotels Company (IHCL) has decided to pump at least Rs 3,000 crore for expansion of the brand in the next 4-5 years.
"We expect that the strong Indian economic growth, the growing base of domestic customers and higher foreign tourists shall benefit us. The focus will be largely in the Indian subcontinent through a mixture of asset light growth and selective capital expenditure outlays. We have a capex of Rs 3,000 crore for next 4-5 years, but it will depend on the performance of the company," IHCL Chairman N Chandrasekaran told shareholders at its 116th annual general meeting here.
The capex for the next year is Rs 300 crore to fund the expansion, he said. "Over the next two years, we expect to open 10 new hotels properties under the Taj brand, 11 under the Ginger brand. This will result in a net addition of 1,883 keys to our portfolio," he added.
Currently, the Taj Group manages 137 hotels with 16,848 rooms. IHCL is also raising up to Rs 1,500 crore through a rights issue. "I am happy to announce that today the Board has approved a Rights issue of Rs 1,500 crore. This will be an opportunity for all shareholders to participate," he added.
Funds are being raised to "meet the company's long-term financing needs for capital expenditure, growth plans and debt repayment", IHCL said. Asked about the Ginger brand, Chandrasekaran said the company is upgrading one property under the brand, and after evaluating will decide on how to place the brand.
Talking about the Sea Rock property, he said the company is waiting for environmental clearance and hopes to get it soon. "On Sea Rock, we continue to make progress on various approvals. In parallel, we are engaged with architects so that we can commence the project soon," he said. The lease on Sea Rock is till 2069, with the right to renew it automatically, he added.