DB Hospitality Pvt Ltd, a Dynamix Balwas Group firm which owns and develops luxury hotel properties, is looking to raise up to $100 million in private equity funding. The Mumbai-based firm is eyeing a new round of fundraising as it eyes expansion and buyback of stake held by a private equity investor, said sources.
DB Hospitality currently has three properties which include Le Royal Meridien in Mumbai, Le Meridien in Ahmedabad and one property in Rajasthan. The firm has also tied up with Hyatt International for properties in Mumbai, Goa, Pune, Hinjewadi and Mundra (Gujarat). Sources said, DB Hospitality has not yet launched a formal fundraising process, but has directly approached a few funds to explore investor interest in its expansion plans.
An email sent to DB Group did not elicit a response at the time of publication of this article. Another Dynamix Balwas group firm, DB Realty Ltd, is also in the market for raising $250 million for developing an asset in Mumbai's Bandra Kurla Complex (BKC).
DB Hospitality said, last year, it plans to develop nine hotels in the country for an investment of Rs 5,500 crore by 2014. DB Hospitality is also building four hotels in Delhi's hospitality district.
DB Hospitality has earlier raised private equity funding from Trinity Capital plc and IL&FS Investment Managers in two tranches since 2006. The firm is now planning to buy back the stake held by Trinity Capital, which holds a 9.54% through Trinity Capital (Seven) Ltd.
Trinity, which is listed on UK's AIM market, earlier said that it plans to sell its stake in DB Hospitality for Rs 100 crore (£14.7 million). The transaction was then delayed, with Trinity saying that it expects to close the deal by October this year. Trinity added that it has got non refundable deposit of approximately Rs 10 crore (£1.4 million).
Trinity Capital also has an investment in the group flagship firm DB Realty, which was listed earlier this year, and another SPV of the group. DB Realty raised Rs 1,500 crore through its maiden public offering earlier this year.
DB Group also has a presence in telecom, where it has a venture to launch services with UAE's Etisalat.
While private equity investments in the hospitality business have been slow most of this year, the interest has increased on the back of a few deals in last two months. Xander Group reportedly invested $110 million in the hospitality division of Pune-based Panchshil Realty, which is developing seven hotels under the Marriott brand.
Another recent deal was IL&FS Investment Managers' Rs 80-crore infusion in Aria Hotels and Consultancy Services, which is building a luxury hotel under the JW Marriott brand in Delhi.