‘We Have Finalised Plans To Enter Hyderabad And Pune’

The Baljee Group of Hotels was planning to go for an Initial Public Offer (IPO) sometime back. Chander K Baljee, managing director of the group tells Vyas Sivanand about the status of the offer and his expansion plans.

EH&C: You were planning take to the IPO way for expansion, sometime back. What is the current status?

Chander K Baljee: The IPO will be out by October of this year. We are looking at generating Rs 100 crore through the IPO for our expansion plans.

What is the total investment towards expansion and how are you planning to fund the rest?

The total investment towards expansion would be around Rs 200 crore, out of which Rs 100 crore will be generated through equity while the rest will be through internal accruals and debt.

Who are your merchant bankers for the IPO? What will be the price at which the IPO will start trading? What about your plans on offering Employee Stock Ownership Plan (ESOP)?

We have finalised on ICICI Securities and SBI Caps as merchant bankers for our IPO. We cannot say anything about the price at which the IPO will start trading, as the merchant bankers will take that decision. Once the IPO is out, we will have a scheme outlined for ESOPs. The options would be ideally for the top management.

How many properties are you planning and which cities have you finalised?

We are planning to add six more properties under our banner. We already have a total of four properties in Bangalore and Mysore. Now we are entering Hyderabad and Pune. We have also finalised another property in Bangalore.

You had plans to go for a re-branding exercise. Could you elucidate on the same?

All hotels will now be under the Royal Orchid banner, which will be the premium brand. There will be sub-brands viz. Royal Orchid Central and Royal Orchid Harsha, which will be four and three star category respectively. We are looking at an 80-room Royal Orchid Central in Hyderabad and a 100-room hotel in Pune under the same sub-brand. The Bangalore property will have about 60 rooms, but we have not yet decided on the category.

What are the latest development at you premium property in Bangalore, Royal Orchid?

The rear block of Royal Orchid Bangalore is in its final stages. The hotel, which has 140 rooms currently, will finally have 195 rooms. The rooms have added facilities of plasma TVs, video phones, fixture bathrooms, private W/C area, DVDs etc. The tariff of the new room would be about $250. Presently, the tariff of our operating rooms are about $175. We have also started a new Oriental restaurant in Royal Orchid along with a roof-top heated pool and a state-of-the-art gymnasium.