Indian hospitality sector already plagued with global recession and terror attacks, may have found some sort of activity going their way.
The latest seems to be a comment by ITC that they are looking to buy new hotels and expand their business in such times of adversity. And there is already speculation that there likely target could be East India Hotels, owner of five star deluxe brand Oberoi and another five star brand Trident.
The happenings may just not be a flash in the pan as it has been heard previously also of EIH willing to divest their stake to investors’ inorder to raise funds for expansion.
Surprisingly, ITC is the second largest shareholder of EIH with a 14.95% stake through their subsidiary for long and the motive of such investment could only be strategic in nature.
Recently, Anil Ambani and Max Group’s Analjit Singh have also picked up stakes in EIH. Some foreign hotel chains are also considering picking up a stake in EIH.
ITC Group also has a good portfolio of hotels with luxury, deluxe and value hotels, and picking up EIH would further augment their position and emerge them as a market leader. It would also give them an exposure to foreign properties, an area which it has avoided till now.
But all things said, it seems very unlikely that Mr.Oberoi would be willing to sell out his take to a strategic investor and a competitor especially when he is on record saying that promoters are seeking to increase their stake to over 50%. More so, Oberoi has built some of the best properties in the world and they are for sure not going to pass the mantle in a stroke.