Royal Orchid plans IPO to fund expansion
04 January 2006
Royal Orchid Hotels (ROHL), a hospitality chain, is raising
Rs102-122 crore from the capital market to set up two
hotels in Pune and Hyderabad.
The initial public offering will be made through a 100-per cent book building process. Post issue, the promoters' holding will come down from 91 per cent to 67.8 per cent (including an eight per cent investment by WestBridge Ventures II Investment Holdings.)
Chander K. Baljee, chairman and managing director of the company, said the Rs 75-crore expansion would enable Royal Orchid Hotels to promote its brand through organic and inorganic routes. The company has four hotels through ownership and management contracts, which include its flagship five star Hotel Royal Orchid, Royal Orchid Harsha and Royal Orchid Central in Bangalore and Royal Orchid Metropole in Mysore a State-owned enterprise.
Baljee said the projects at Hyderabad and Pune together would have 172 rooms and would cater to business customers. He said Royal Orchid will focus on five star and four star business class hotels, as this segment is poised for a high demand.While the Hyderabad project is a joint venture, the Pune hotel will be owned and managed by ROHL.