Mayfair group to raise Rs 250cr via IPO & PE

Written by Dilip Bisoi | Bhubaneswar, Apr 27 | Updated: Apr 28 2008, 06:06am hrs
Mayfair group, the biggest hotel chain in eastern India, is planning to raise Rs 250 crore through the initial public offering and private equity routes to expand its activities further in the region in the next two years.

"By 2010, we want to develop at least 11 projects spread over eight locations to continue our leadership position in the eastern region, said group chairman Dilip Ray. According to him, the group hotels would have a total of 576 rooms by then.

Mayfair is proposing to immediately develop a property in Gangtok. The 48-acre property has been taken on lease from the former chief minister of Sikkim, Nar Bahadur Bhandari. A 5-star deluxe spa resort will come up on about 15 acres with facilities for online casino.

In Orissa, the group has acquired 100 acres in Sipakuda village on the shore of the Chilika Lake to develop a 5-start deluxe resort of international standard with golf course and helipad. It is also planning to set up a new hotel in Cuttack, while undertaking repair, renovation and replacements (RRR) of its existing hotels in Bhubaneswar, Puri and Rourkela.

Mayfair is also looking at acquiring a hotel in Hyderabad and converting it into a 5-star one. The company has bought two properties in Darjeeling, where it already has a hotel. It is also looking for a plot at Rajarhat in Kolkata and another in Siliguri.

Ray, who now holds 100% equity of the company, said the group was planning to raise Rs 250 crore through IPO, private equity and internal accruals. "We may go for the private equity within a month and by mid-2009 will enter the market with the IPO", he said.

While it is expected that the IPO will help raising Rs 117 crore, private equity will bring in another Rs 40 crore. The group, which has a total of 1.52 crore shares of face value Rs 10 each, will dilute upto 40-45 % of its stake.

Equity fund companies from India, the US and a few other countries were in touch for the private equity offer, Ray said.