Home / Market / Stock-market-news /  Kolkata-based Jain Group expects Rs30.5 crore from Dream Gateway Hotels IPO

Kolkata: Kolkata-based real estate developer Jain Group on Tuesday said it is looking to raise Rs30.5 crore from the initial public offering (IPO) of its hospitality arm, Dream Gateway Hotels Ltd to fund its expansion plans.

Dream Gateway Hotels has budgeted for an investment of Rs365 crore over the next 3 years to expand operations in Kolkata, Siliguri and Durgapur under the Holiday Inn brand.

The draft red herring prospectus for the IPO was filed with the markets regulator Sebi 15 days ago, and the public issue is expected to hit the market towards the end of June.

The share sale will result in dilution of promoter holding by 28%.

The company is looking to sell 3.22 million shares to investors and around 170,000 shares to so called market makers for Rs90 each—much lower than the per-share valuation of Rs140-150 that the company had said in December it was expecting for the share sale.

The expectation was unrealistic, admitted executive director Rishi Jain. The price determined for the share sale was arrived at through discussion with investment bankers and external advisors, he added.

The company is looking to list itself on the BSE’s special trading platform for small and medium enterprises.

Dream Gateway currently owns a 137-room hotel in Kolkata, which is operated under the Holiday Inn brand. Another 100-room property is coming up next to the operating hotel. It has budgeted for an investment of Rs75-80 crore on this property.

The company has tied up with US hospitality chain InterContinental Hotels Group, and is building at least two more properties at Siliguri and Durgapur, both in West Bengal.

The company will be building a 120-room hotels in Siliguri at an estimated cost of Rs140 crore and in Durgapur at a cost of Rs145 crore. Both properties are expected to be commissioned within three years.

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