It would be looking at Tamil Nadu for growing its other businesses too
The ITC group is in the process of expanding its hotel chain in the country even as it is well on course to set up its maiden venture overseas with a Greenfield project in Sri Lanka.
“We have a huge investment plan for hotels,” ITC Ltd Chairman Y. C. Deveshwar told presspersons after the inauguration of ITC Grand Chola, a Rs. 1,200-crore 600-room super-premium integrated luxury hotel complex, here on Saturday.
The luxury hotel, accredited as the world’s largest LEED (Leadership in Energy and Environmental Design) platinum rated hotel in the new construction category, was opened by Chief Minister Jayalalithaa.
Executive Director Nakul Anand said 5,000 rooms would be added in the next four-to-five years to the existing 8,000, and many more were in the drawing boards. All these were under various brands of ITC hotels.
Mr. Deveshwar said ITC group planned to invest Rs. 25,000 crore in the next 5 years. Most of it would be funded through internal accruals. The entire investment of ITC Grand Chola was also done through internal accruals. “Whichever business is smarter, and able to execute will get more [investment]. Nothing is given … if you execute projects faster, the funds can come to you … if you don’t, the funds will be taken away,” he said. “Actually, we would like to grow even faster, so that we can get more debt, but we are not growing fast enough. We have 40 projects going all over India, but this is not fast enough, we can grow faster,” he said.
Stating that there was no dearth of funds as “we can also borrow”, he said: “Quite contrary to what you might hear that India is not attracting investments, my refrain is different. My refrain is we are not getting permissions enough everywhere … things are not moving fast enough … give us clearances so that we can make more investments.”
On the investment required for the 5,000 rooms, Mr. Anand said the average cost of establishment of a room in the premium segment was from Rs.1.5-1.8 crore, while it was Rs.1 crore per room in the luxury segment. In full serviced, four-star category hotel, it worked out to Rs. 60-70 lakh a room.
The new hotels are coming up in Hyderabad, Kolkata, Delhi, Coimbatore, Ahmedabad, Amritsar and Bhubaneswar. In Colombo, it would be a super-luxury hotel and the estimated investment is Rs. 500 crore. I would take three-to-three-and-half years to build. Mr. Deveshwar said he informed the Chief Minister that the group would be looking at Tamil Nadu for growing its other businesses, too. The plans include converting the plant of Wimco, a company acquired by the group, near Chennai into a food processing unit. It has also purchased 30-40 acres near Chennai for setting up a logistic hub and manufacturing unit for snacks. On the lines of ITC Hotels, the group wanted to build Indian FMCG brands.