Kotak Real Estate Fund-backed hospitality firm Pride Hotels Ltd is looking to raise funds through a public offer to complete its upcoming hotel project in Delhi. The firm is expected to finance roughly half of the estimated Rs 255-crore project cost through the public issue that will comprise 25% of the diluted equity base.
If the firm raises just around Rs 135 crore, the company will be valued at around Rs 550 crore ($120 million). The exact size of the issue is not clear for now, but, in a statement last year, the top management had said the firm plans to raise Rs 200 crore through a public offering. If the firm indeed raises Rs 200 crore, it will value the company at Rs 800 crore giving around 50% unrealised gains for Kotak Real Estate Fund and around 10% book profit to another private equity investor.
Kotak Real Estate Fund had invested Rs 45 crore in September 2007 and currently owns 10.9% stake with average cost of purchase of Rs 133 per share. Another outside investor in the company is Primary Real Estate Investments, Mauritius that put in Rs 10 crore a few months after Kotak and has an average cost of purchase at Rs 182 per share.
Pride Hotels is promoted by its managing director SP Jain and family. It runs nine hotels in cities such as Pune, Bengaluru, Nagpur, Ahmedabad, Chennai and Jaipur. For the year ended March’10 it had total revenue of Rs 78 crore with net profit of Rs 17 crore.