Indian Hotels Co. Ltd (IHCL), the operator of Taj Hotels Resorts and Palaces, will pursue an asset-light model as part of its strategy to pare its debt while continuing to increase the footprint of their brands in India and overseas markets, a top company executive said.

The company, which has announced its plan to sell the Taj Boston hotel in the US, said its current focus markets are India, Gulf Cooperation Council (GCC) countries and South East Asia where it will “aggressively look for management contracts". Thailand, Vietnam, Cambodia and Singapore are a few of the countries that the company is planning to enter in the next few years.

“We will be divesting certain assets in the spirit of being asset light and using those proceeds of divestment to not only reduce our financial exposure but to fuel growth. Our growth agenda remains intact and our number one market and focus for development is India," said Rakesh Sarna, managing director and chief executive officer of Indian Hotels Co. said at a press conference here.

The Tata group firm has been in the process of restructuring its business for the past one year in a bid to reduce its debt and return to profitable growth. At the end of 31 March, the company’s consolidated net debt stood at 4,386 crore.

In a filing to the BSE on Wednesday, the company said it will sell its Boston property for no less than $125 million to “suitable independent third parties, which shall not be a promoter, or a promoter group entity or any group company, who are interested in leveraging upon the “Taj" brand. The company had bought the hotel which was then called Ritz-Carlton, Boston Hotel in 2006 from US-based Millennium Partners for around $170 million.

The company plans to use the entire proceed of the divestment to retire debt, particularly its offshore debt. Sarna said the company will continue to look at divesting some of its own assets and focus on adopting growth strategies where it has less financial exposure and risk.

In India, the company plans to increase its footprint in gateway cities such as Mumbai, Delhi, Hyderabad and Bengaluru while exploring locations like the North-Eastern part of the country. It plans to open 10 new hotels with over 900 rooms in total both in India and abroad in the next one year. Most of these upcoming hotels would be run through management contracts with the property owners.

The company is also looking to expand its business in the international markets like Dubai, Abu Dhabi, Muscat and Doha apart from other south Asian tourist destinations.

“Markets like Singapore, Tokyo and Seoul have high barriers to entry with very intensive investments. We have no desire to take a financial exposure in areas where there is even an iota of risk. We will do everything we can to grow the company but we will not expose to any undue risk," Sarna said.

The company’s net consolidated loss narrowed to 60.53 crore in the year ended 31 March from 378.10 crore in the previous financial year. On a standalone basis, its net profit in the fourth quarter stood at 88 crore as against a loss of 119.15 crore in the year-ago quarter.

On the company’s shift to an asset-light model through management contracts, Anil P. Goel, executive director (finance), IHCL explained that with the rising real estate prices, “it is not desirable to own everything (assets)".

“We would be flexible how the company gets involved with the asset. The important thing is location, product and focus on the brand," said Goel.