Piramal Finance eyes hospitality sector
MUMBAI: Piramal Finance Ltd, the non-banking financial company of Piramal Enterprises Ltd (PEL), is planning to invest in the hospitality sector for the first time and has started talks with a few hotel companies, according to two people aware of the development.
The Ajay-Piramal group firm, which mostly funds residential and commercial real estate projects, is diversifying its portfolio into the hospitality sector which has started turning around in the last two years, said one of the people cited earlier on condition of anonymity. “Piramal Finance have been given the mandate by Group to either take a minority equity position or offer structured debt to hotel companies and owners,” the person said.
According to this person, the company has started scouting for opportunities across the country with interest in investing in branded hotels as well as individual owned hotel properties or portfolio of assets.
A Piramal Finance spokesperson did not reply to an email seeking comment.
Piramal is looking to be primarily in the lending space providing structured debt to hospitality firms, said the second of the two people cited earlier. This person said that the company is expected to make its first transaction in the first quarter of 2018. “It’s a sector which they (Piramals) are seeing an opportunity in financing. They never been a marginal player and would definitely want to scale up soon,” the person said.
Piramal Enterprises has assets under management of over ₹50,000 crore in real estate.
“Largely, hotel companies have been financed by the public sector. But now we are seeing interest from new lenders as the hotel sector slowly shows signs of turning around,” said Shobhit Agarwal, MD (capital markets) JLL India, a property consultant.
According to HVS Global Hospitality Services, pan-India hotel occupancy has hit 65% in 2017 for the first time since 2008-2009.