Mumbai: Hotel chain operator Royal Orchid Hotels Ltd has invested about Rs300 crore to open six new properties across India by December to add to its chain of 16, a senior official told reporters on Thursday.
The new properties would result in an addition of about 900 rooms and the total room tally would go up to about 2,200 by December, Keshav Baljee, president, told reporters on the sidelines of the Hotel Investment Conference, South Asia.
The Rs300 crore investment has been made through an equal mix of debt and equity, he said, adding the new properties would be across cities such as Jaipur, Hyderabad and NCR.
Orchid has a board approval in place to raise about Rs100 crore through a qualified institutional placement, but prefers to wait for a suitable acquisition before raising funds.
“We have too many projects coming through but there is no immediate requirement for any funds. We are actively pursuing management contracts and growing aggressively,” Baljee said.
“The QIP will happen if we spot an acquisition opportunity too good to miss.”
Indian hotel chains are raising funds but prefering to use the cash to clean up their balance sheet and complete existing projects than draw new plans.
Baljee said he expects the average room rate to rise by 5-10% this fiscal. Manav Thadani, chairman of HVS India, a hospitality consultancy, said there are about 60,000 rooms in India at different stages of construction and development in the branded segment to be opened latest by 2015.
The country requires an investment of $10.3 billion to fund this hotel pipeline, he added.
At 01.06 pm, shares of Royal Orchid, which the market values at $42.8 million, were up 2.66% at Rs71.40 in a choppy Mumbai market.