OPEN APP
Home / Companies / News /  IHCL to buy balance stake in Roots Corp., raise 4,000 crore
Listen to this article

NEW DELHI : Indian Hotels Co. Ltd (IHCL) on Thursday said it plans to buy the 40% stake it doesn’t own in unit Roots Corp. Ltd, which runs the Ginger brand of economy hotels, for 500 crore.

The IHCL board also approved plans to raise up to 2,000 crore by selling shares to existing investors and another 2,000 crore by selling shares to financial institutions, totalling 4,000 crore.

The money will be used to fund capital expenditure and become a zero-debt company.

The stake purchase in Roots Corp. is expected to be completed by 31 December, making it a wholly owned subsidiary of IHCL.

Established in 2003, Roots operates 55 Ginger hotels across the country and has 26 more under development
View Full Image
Established in 2003, Roots operates 55 Ginger hotels across the country and has 26 more under development (Photo: Mint)

In a statement to the stock exchanges, IHCL said its board approved the purchase of 39.84% of Roots Corp. from Omega TC Holdings, Tata Capital, Tata Investment Corp. and Piem Hotels.

Established in 2003, Roots operates 55 Ginger hotels across the country and has 26 more under development.

IHCL narrowed its September quarter loss to 121crore from 230 crore in the year earlier, while revenue rose 132% to 752 crore.

The company operates hotels under different brands, namely Taj, SeleQtions, Vivanta and Ginger.

Puneet Chhatwal, managing director and chief executive officer of IHCL, said that overall recovery has been stronger and quicker after the second wave.

“The company has delivered a positive Ebitda of 97 crore in this quarter. In line with IHCL’s objective of driving growth and market leadership, the board approval of raising equity of 4,000 crore will enable us to be a zero-debt company in the future and help fund the company’s expansion as well as its capital expenditure plans," he said.

The company said it has opened four new hotels during the year across different brands, including three SeleQtions hotels—one each in Kolkata, Bhubaneswar and Nainital; and a Vivanta in Ahmedabad, and a Ginger in Udaipur.

Earlier this year, IHCL opened four new hotels across different brands, including Taj Lakefront in Bhopal and Pilibhit House—an IHCL SeleQtions hotel—on the banks of the Ganges in Haridwar. It also launched two Vivanta hotels in Bhubaneswar and Goa. The company’s members-only club launched its new outpost in London.

IHCL, which added a homestay division to its portfolio in 2019—Amã Stays & Trails—now has 59 bungalows in India.

Jehangir Aibara, director at hospitality consultant Mahajan & Aibara, said Ginger has been operating as a separate vertical all this while and has limited synergies with IHCL’s operating structure.

“Its new rebranded identity is much more similar aesthetically to the other IHCL-run hotels and could potentially benefit both companies if it comes under one umbrella business. Roots could also perhaps then leverage IHCL’s sales network and other hotel management technologies," he said.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close
× My ReadsRedeem a Gift CardLogout