The Dharampal Satyapal (DS) Group, which makes Rajngandha pan masala and Catch table salt, has chalked out plans to increase its footprint into the fast expanding India's hospitality sector.
The privately held Rs.3,000-crore annual sales conglomerate that garners more than a third
of its revenue from food and beverage products made a careful entry into the hospitality sector when a it acquired a 67-room hotel - Manu Maharani-at Nainital, around a decade ago. Now it is ready for a big round of expansion.
Rajiv Kumar, vice-chairman of the DS Group, said the acquisition helped the company test waters of the hospitality sector and learn the basics.
The group has now decided to develop five hotels in Guwahati, Jaipur, Kolkata and Jim Corbett National Park.
"We plan to invest Rs.875 crore for the development of our five upcoming hotels," Kumar said.
He added that the company has already invested close to Rs. 375 crore and the remaining amount will be invested over the next two years. "The amount will be sourced through a mix of debt and internal accruals," he added.
The new hotels are a mix of budget and star category where the total number of rooms would be around 940.
The group has tied up with international hotel brands such as Country Inn and Radisson for management of its hotels.
Kumar dismissed possibilities of further acquisitions in hospitality.
"We are definitely not in the game to acquire any hotel firm, we will rather develop our own green field projects," he said. Kumar explained his reluctance to acquisition by saying that the "financials do not work out" in buying out a hotel firm.
India currently has around 1,00,000 hotel rooms in all categories, which is less than the hotel rooms present in Dubai, Bangkok and Las Vegas.
DS Group has been growing at around 35% yearly and expects to garner R3,000 crore sales revenue in the current fiscal year.
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