Indian Hotels to mop up ~3,000 cr via rights issue

Indian Hotels Co Ltd (IHCL) will raise up to ~3,000 crore through a rights issue, the company said in a notification to the exchanges on Monday. The issue is subject to relevant approvals from regulatory authorities. The proceeds will be utilised for capital expenditure, growth plans and debt repayment and will be finalised in consultation with the merchant bankers, it said.

The hospitality arm of Tata Group has been using the rights issue route as a fundraising instrument with a regular frequency. The company raised ~1,500 crore in April 2017, ~1,000 crore in January 2016 and ~844 crore in February 2008 through it.

IHCL’S consolidated net debt rose to ~3,612 crore at the end of June 30, from ~3,110 crore at the end of March 31 because of cash burn due to the second wave in April, May and June.

The company plans to pare debt over the next three to six months. It is also open to any kind of inorganic growth opportunities that might come by, the company’s management said earlier this month.

IHCL’S board also approved the formation of a committee of directors for the issue to decide on its terms and conditions including the rights entitlement ratio, the issue price, record date, timing and other related matters, it said.