The share price of Indian Hotels on Thursday fell by 5% intra-day before closing at Rs 123.30, after New Delhi Municipal Corporation (NMDC) decided to conduct an open auction of its property Hotel Taj Mansingh. This is the biggest intra-day fall for Indian Hotels stock since November 2016.
On January 12, the Supreme Court had asked the NDMC to reconsider its decision to auction Taj Mansingh hotel within six weeks. The apex court had asked the civic body to settle the issue through negotiations or go for auction. NDMC on Thursday decided to go ahead with the auction.
SC passed the order after Indian Hotels appealed against a Delhi high court judgment which allowed NDMC to end the 33-year lease and auction the property. The high court had earlier dismissed Indian Hotels plea challenging NDMC’s move to auction the property and said the company has no right to renewal of the licence period. The high court further said that NDMC was within its power to secure maximum consideration for the grant of licence for the property located at Man Singh Road in Delhi.
You might also want to see this:
Barring financial year 2012, Indian Hotels had been posting losses for the past seven years, data from Bloomberg revealed. The total debt of the company as of March 2016 stood at R4,781.41 crore. For the quarter ended December, Indian Hotels posted a profit of R92.98 crore, which helped it to reduce its losses for the nine-months ended December 2016 to R103.23 crore from R211 crore during the same period in the previous year.