Bharat Hotels plans to add seven five-star hotels in the country over the next three years at an investment of Rs.1,000 crore. Finer details of the seven hotels would be finalized over the next six months.

The new projects are planned at Amritsar, Ahmedabad, Bangalore, Chennai, Hyderabad, Bekal (Kerala), and Jaipur.

The group would use a mix of funding options including internal accruals, borrowings and private placement of equity with venture capital funds to finance the projects. While it plans to raise Rs.250 crore in loans, around Rs.300 crore would come from internal accruals over the next three years. The group has also planned to make an initial public offering of equity shares in the next two years.

Other plans: Once the luxury hotel projects get underway, Bharat Hotels also plan to venture overseas. It has plans of setting up hotels in Dubai, London & New York.  While the Dubai project will be a greenfield one, the group plans to buy properties in the other two locations.  After the five-star hotel chain project is complete, the group might enter the budget hotel category.

Bharat Hotels: Background

Bharat Hotels Ltd -- with Mr Lalit Suri as CMD -- owns and operates five-star hotels under the "Grand" brand name at New Delhi, Mumbai, Goa, Srinagar, Bangalore, Udaipur and Khajuraho. The company is closely-held by the Suris who hold about 98 per cent of the Rs.72 crore equity capital. BHL has plans to private place 10-15 per cent equity with venture capital funds following which the promoters' holding would dilute to that extent. In 2004-05, BHL reported a turnover of Rs.200 crore with a gross profit of Rs.77 crore.