Royal Orchid to invest Rs 500 crore for expansion

AHMEDABAD: Royal Orchid group of hotels plans to invest around Rs 500 crore to almost double its count of hotels in the country by next fiscal, a top company official said here.

"We are looking for expansion through the contract manufacturing route. The proposal is to take our hotel count to 20 by next fiscal from the existing 13 facilities across the country," Chairman and Managing Director Royal Orchid Chender Baljee told newsmen.

"In this series two of our four star hotels Central Royal Orchid will be opened shortly in Navi Mumbai and Shimoga in Karnataka," Baljee said.

"As per the contract manufacturing route we shall be forging alliance with property owners in India, provide them our brand and will charge them on the basis of turnover and profits," Baljee said, while referring to the business model.

The company had raised funds through an Initial Public Offering (IPO) in 2006 to fund its expansion plans.

"The company has proposed to use the IPO proceeds of Rs 500 crore to fund its expansion plans, besides debt," Baljee said.

"One of our five star hotels is proposed to come up in Jaipur by the end of this year, and another 240 room hotel in Hyderabad in next financial year," Baljee said.