Gammon India planning to invest Rs100 to 150 crore in hotels

Construction major Gammon India will invest between Rs100 to Rs150 crore ($25 to 38 million) in the hospitality business. Gammon managing director Pervez Umrigar told CNBC-TV18 in an interview that the first hotel property is expected to start operating by June 2009.

The company is said to be looking at 38 properties to set up Super 8 and Days Inn franchises by 2011. It signed the agreement last month. All of them are likely to be in the budget business segment, and Gammon expects the commissioning phase to last about 15 to 18 months.

Gammon says the total capex should come to Rs350 to 400 crore ($88 to 101 million), which means an equity base of around Rs100 to 150 crore, which the company plans to generate from internal revenues. It has not decided whether it will list the new entity and have an IPO.