‘ITDC will sell shares to meet Sebi norms’

Government-owned hospitality company, India Tourism Development Corporation (ITDC), had let go of a few properties as the Centre wants it to focus on areas outside the hotel business. RAVNEET KAUR, chairperson and managing director, speaks to Ajay Modi on how the firm wants to grow its other verticals while leveraging brand Ashok. Kaur said the firm can look to partner IHCL (which holds an eight per cent stake) and introduce a guest loyalty programme. Edited excerpts:

The hotel portfolio of ITDC has shrunk. How is the firm adjusting to this change?

Over the past two years, we have undertaken disinvestment of some hotels. Janpath Hotel (Delhi) and Jaipur Ashok were transferred last year. This year, it was Lalitha Mahal Palace Hotel in Mysore. These are the three major hotels. There was also the Bharatpur Forest Lodge, which was handed over by ITDC. For joint ventures, it has been Hotel Lakeview Bhopal, Hotel Brahmaputra Ashok, Guwahati, and the third one which has gone this year is Hotel Donyi Polo Ashok, Itanagar. In case of joint ventures (JVs), the model has been dilution of equity, where other JV partners have taken ITDC equity. As ITDC hotels were being run on leased lands, it was decided in case states are not willing to extend the lease, then the hotels should go back to the state. In the case of Janpath, it has gone back to the Ministry of Housing and Urban Affairs. There has been some shrinkage, but all along the major chunk of profits were coming from The Ashok and Hotel Samrat, and it continues this way.

What does the future of IT DC look like as it seeks to become a diversified player?

We are looking into it and in fact have conducted an inhouse business plan which is more like where we want to go. We are in the process of engaging strategic consultants who will give us firm options and the potential relevant to the organisation. But it is very clear that we are going to be diversifying more and more to other verticals outside the hotel business. We are moving towards being a one-stop solution provider for the tourism and hospitality sector.

IT DC has along experience of running a hotel. Can that skill set be used anywhere else or you think IT DC would let it die gradually?

We, in fact, face this eventuality. Now, the Ashok Events division is being manned by a person from the hotel division and so is the case with Ashok Travels and Tours division. We are retraining the staff, re-deploying them, getting them to take up something else which they have expertise in or can acquire. Also, a lot of internal HR policy changes are being undertaken to enable flexibility so that people can move from one division to another.

The government owns 87 percent stake in IT DC as promoter. Is the company working towards meeting Se bi' s norm of minimum 25 percent public share holding?

We should be in line for that because the government has already appointed merchant bankers and we have had initial discussions with them. Now, as and when the government gives clearance, we'll be achieving the requirement of 25 per cent public shareholding.

Does the revised floor area ratio (FAR) norm allow for construction of more rooms in the Ashok-Samrat Hotel complex?

One of the big advantages of the Ashok-Samrat complex is that it is huge and now ground coverage norms have gone up. So, there is possibility of additional FAR and additional ground coverage.

The Indian Hotels Company has a stake of eight per cent in ITDC. As a large shareholder, what are their expectations? Since the two companies are in same space, is there scope to work together?

We are not in regular touch with it as there is none from IHCL on the board of ITDC. IHCL are keeping a watch on how shares are performing. Some partnership should be possible where we collectively look at doing some brand loyalty programmes because our presence outside Delhi has come down.