‘We Will Be Taking The IPO Route For Future Expansions’

Kolkata-based HHI Group of Hotels has embarked on an ambitious expansion plan to spread its horizons in other parts of the country and upgrade its existing properties in Kolkata and Varanasi. D K Jaiswal, chairman and managing director (CMD), HHI Group of Hotels, Kolkata spoke to Joy Roy Choudhury about what is in store. Excerpts...

EH&C: Most of the players in the Indian hospitality industry are on a major expansion drive. Is the HHI Group also looking at more properties in the future?

D K JAISWAL: While hospitality and tourism sectors in the country are witnessing a substantial growth, the big question to ask here is whether the Indian hospitality industry is equipped to handle this boom? This is one reason why most hotel companies have decided to expand by way of setting up hotels in different parts of the country.

HHI is expanding its horizons and will be setting up two properties in Goa and Bangalore. This apart, we will also be refurbishing our existing hotels. This will happen in the first phase of expansion. In the second phase, we plan to introduce our no-frills hotel brand. We also plan to set up a hotel in Mumbai. The group plans to acquire an existing property and turn it into a four-star hotel. We have identified few such properties in the city and will take a final decision soon.

How do you plan to fund the group’s expansion and refurbishment plans?

The expansion, renovation and refurbishment undertaken till date have been funded through internal accruals or through lending from banks and financial institutions. However, for the second phase of expansion, we will be taking the Initial Public Offer (IPO) route. We are in the process of preparing the necessary documents and will float the first public offering in the next couple of months. The size of the IPO is likely to be around Rs 300 crore, though we are yet to take a final decision on the same. We will approach the market with a concrete project plan.

Which destinations will the no-frills budget hotel brand come up in India? How many properties are you looking at?

In all we plan to set up seven to eight budget hotels in upcoming non-metros of the country. We are looking at places like Ahmedabad, Pune, Raipur, Aurangabad, Jamshedpur and Siliguri. However, a final decision on the locations will be taken shorty. The no-frills hotel will have one or two restaurants and will do away with high-investment facilities like spas, banquet halls and swimming pools. These hotels will mainly target the business travel segment.

What is the status on the construction on your Goa and Bangalore properties?

The construction for the Goa hotel has already started and is likely to be completed by this year-end. Located near the Varca Beach in South Goa, it will be a boutique hotel with 80-100 rooms, specially targeting the leisure tourists. The group has invested to the tune of Rs 55 crore in this project. We are in talks with major global hospitality giants for a strategic alliance for this hotel. Discussions are on with hotel companies like the Le Meridien Hotels & Resorts Limited and Shangri-La Group of Hotels and Resorts. A final decision, however, is still to be taken.

The Bangalore property is a non-operational four-star property. We are completely refurbishing it and will launch within the next six months. It is going to be a 186-room hotel and we have invested to the tune of Rs 50 crore into the project.