Country's largest Hotel, Hospitality Chain from ITC & EIH


Diversified tobacco major Indian Tobacco Company Ltd. (ITC) who have interests in Hotel and Hospitality, and East India Hotels, Oberoi, two major corporates already in the Hospitality line have a blueprint to combine and emerge as the largest hotel chain in the country in terms of revenues generated

Diversified tobacco major Indian Tobacco Company Ltd. (ITC) who have interests in Hotel and Hospitality, and East India Hotels, Oberoi, two major corporates already in the Hospitality line have a blueprint to combine and emerge as the largest hotel chain in the country in terms of revenues generated. Once the plans are finalized, the Chain will see a Three Way Venture between these 2 majors on the one hand and Reliance Industries (RIL) on the other. RIL has a stake of 14.8%, in EIH with Oberois and ITC with a stake of 32% and 14.98%.

If the plan fructifies, ITC would demerge its Hotel business which would pave way for a partnership with EIH. With the combined revenue of these two majors at Rs 1948 crores, domestic and overseas expansion could be the right choice and leveraged. Besides the combined entity would become the largest hotel chains, in terms of revenues surpassing the Tata Group's Taj, Indian Hotels. Presently in terms of revenues, Indian Hotels, with Rs 1566 crores for the year 2009-10 is the largest chain of Hotels However, with the combined entity of ITC and EIH taking place, the new entity would become the largest chain in the hospitality sector in the country with its eyes on domestic and overseas projects firmly fixed. RIL would however, not interfere in the day to day affairs and management.

Analysts feel that the merger will unlock some of the hidden value of ITC Hotel division. The major revenue of 66% of ITC is from the tobacco business. Reliable sources indicate that the talks are at a preliminary stage.


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