India Hospitality Corporation (IHC), a Cayman Islands-based firm which recently entered into an agreement with EWDPL through its wholly-owned subsidiary Gordon House Estates Pvt Ltd (GHEPL) to manage latter’s hotels and food and beverage (F&B) outlets, is planning to launch a Rs 1,000-crore fund to chase acquisition targets.
The company plans to launch it as non-dilutive fund to finance acquisition rather than using its own equity. Sandeep Vyas, COO and director, IHC told VCCircle that its existing partners such as Navis Capital will contribute to the fund. The company is also looking to raise funds from other institutional investors in the overseas market.
He stated that a large chunk of investment from the fund will go for the growth of hotel assets in tier II and III cities in India. “We plan to acquire more hotels to build large hotel portfolio in tier II and III cities. We are largely looking at close to completion or completed projects,” said Vyas.
The company, which has acquired the franchise right of Pizza Hut for central India from Treasure Food & Beverage Pvt Ltd recently, believes that central India offers a very good growth opportunity for Pizza Hut. However, Vyas said, the focus area of the company was to buy hotel assets across India and scale up the business.
From 2007, IHC has invested over Rs 800 crore in Indian hospitality space. Some of its major acquisitions include SkyGourmet Catering Pvt Ltd, Mars Restaurants Pvt Ltd and Gordon House Hotels. Without divulging further details, Vyas informed that the company is looking for investment opportunities in the space, and quite a few deals are in the pipeline to be finalised soon.
Last year, IHC initiated talks to acquire Nirula’s in which its partner Navis Capital Partners has invested $20 million in 2006 for a majority stake. The deal did not go through then and the company has no such plan to re-look at the acquisition at this stage. The revenue of the company was $34.7 million in FY 2008-09.