A: I think everything has a price. But that said, we are very much in the investment mode for our company and we are expect to grow our company over the next several years. So, at this point of time, there is no talk of a stake sale or the divestment. On the contrary, the promoters have actually recently subscribed to warrants where we are increasing our stake in the company. Unlike in EIH's case, we actually own about 70% of the company. So, we are not in risk of having anyone come into the company and take a large stake and worry us at this point of time.
Q: The deal, which took place between Reliance and EIH, was at a heightened premium. So, the investor interest is always there, 22% premium took place. Do you think this is an opportune moment to maybe go ahead and raise some money via the equity route because we understand that you have planned to invest about Rs 500 crore over the next two years?
A: In fact recently we had a board meeting where we announced an enabling resolution to raise about Rs 150 crore via either NCDs or equity. So, it could be a combination of some structured instruments. So, definitely we are in the market to raise some money for the company's further expansion and development.
At this point of time, obviously, we don't have a fix on the time frame, but the maximum quantum of funds that we are currently allowed to raise by the board is about Rs 150 crore. So, very much we are in the market for that.
But, yes, it's a good news that certain deals like this happen and they put the spot light into the hospitality sector and also raise prices, which will help us raise equity at a later stage, probably more favorable rates. But there isn't much dilution plan at this point of time because we don't really need it. At this point of time, we have got closure for all the projects that we are going to be developing and opening this year, which is about 700 keys. For the projects that are coming up year after that, we are very much looking at achieving financial closure within next month or so.
Q: We are also approaching the peak season, the October to December. It's the festive season, a vacation. Do you all plan to raise your room rents any time soon?
A: Yes, absolutely. These rates obviously are factor of negotiations that are currently ongoing between Royal Orchid and some of our key corporate clients. The rates are also factor of the general demand and supply between what we call the free end independent travelers or the FITs. So, while we do negotiate the corporates, some of the other rates are not negotiated. However, this year we do plan to raise our rates almost across the board by at least 10% to 15%. Of course like I said it's going to be on a case by case basis or a hotel to hotel basis well as the client to client basis and all of these are individually negotiated with the clients. So, we will know the results of these only when October comes around. But we are already expecting to raise our rates substantially in the next few months.
Q: If you can just quickly update us on what your current occupancies are going at then and what's your current Average Room Rates (ARRs) would be?
A: Across our 14 hotels, we actually just launched a hotel this weekend, but excluding that across 13 hotels, we have an ARR of about Rs 4,300 currently and occupancy of about 64%-65%. So that has not changed significantly from the last time I came on this channel. But given that this is currently the off season, we expect it to significantly improve once October comes around
http://www.moneycontrol.com/news/business/royal-orchids-to-add-700-rooms-this-year_481941.html `
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