Indian Hotels to raise Rs 3,000 cr via rights issue for capex, pruning debt

Tata Group's hospitality arm has been using rights issues for fund raising regularly. It raised Rs 1,500 cr in April 2017, Rs 1,000 cr in January 2016 and Rs 844 crore in Feb 2008

Indian Hotels Co Ltd (IHCL) will raise up to Rs 3,000 crore through a rights issue, the company said in a notification to the exchanges on Monday. The issue is subject to receipt of relevant approvals from regulatory authorities. The proceeds of the issue 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 the Tata Group has been using rights issues as a fund raising instrument with a regular frequency. The company raised Rs 1,500 crore in April 2017, Rs 1,000 crore in January 2016 and Rs 844 crore in Feb 2008 through it.      

IHCL’s consolidated net debt  rose to Rs3612 crore at the end of 30 June from Rs3110 crore at the end of March 31 because of cash burn due to the second wave in the months of 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 said Rights 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.