Jain Group to raise Rs 30 crore to fund expansion
Kolkata-based real estate and hospitality developer, Jain Group is planning look to list its flagship company, Dream Gateway Hotels, and raise around Rs 30.51 crore through its maiden public offer by early July to fund expansion,
According to Dream Gateway Hotels vice chairman Shrayans Jain, around Rs 75 crore is required for the phase-II expansion of Holiday Inn Kolkata Airport hotel. While Rs 30 crore will come from the IPO proceeds, another Rs 25 crore will come from internal accruals. Balance Rs 10 crore will be loans from financial institutions and banks.
The existing Holiday Inn Kolkata Airport Hotel has 137 rooms, apart from other facilities such as banqueting, restaurant and so on.
The company is going ahead with the proposed fixed price IPO issue despite pricing expectations were much lower at Rs 90 per share against previous expectations of Rs 140 per share. According to Jain, “We have arrived at the pricing of Rs 90 per share based on the feedbacks by merchant bankers and the existing market scenario,” he added.
The shares will be listed on the BSE SME platform issuing fresh 32.21 lakh shares of Rs 10 each to investors and additional 1,70,000 shares to market makers. Post IPO, the promoter group will hold 72 % in Dream Gateway Hotels. The group owns 100 % now.
The company proposes to develop two other hotels in Siliguri and Durgapur. The proposed hotel properties will entail an additional investment of Rs 240 crore. Construction of the Siliguri Holiday Inn hotel is expected to begin by end of this year. Intercontinental Hotels Group owns the management contract for Kolkata hotel and the same operator is expected for the next two properties, Jain said.