PRS Oberoi-led East India Hotels or EIH on Monday inducted Nita Ambani, wife of India’s wealthiest man and Reliance Industries Ltd (RIL) chairman Mukesh Ambani, on the board of the hotel chain, triggering talk that both the groups may jointly execute projects in the hospitality and premium residential space.
Manoj Modi, a trusted lieutenant of the Ambani and senior RIL executive, has also joined the board, besides Renu Sud Karnad, managing director at Housing Development Finance Corp (HDFC) and Robert Henry Burns, Regent Int. Hotels.
Last year, the Oberoi family-led promoters had divested 14.6% in favour of Reliance Industries Investment and Holding Private Ltd for more than Rs. 1,000 crore. Reliance later acquired 0.3% more in EIH Ltd from the open market.
The move was widely seen as an attempt by the promoters of EIH% to rope in Mukesh Ambani as a “white knight” to ward off a possible open offer by competitors such as ITC, which holds a 14.85% stake in the company.
“The management structure remains unchanged for the company. The new appointments for the additional directors are for non-executive role,” a company spokesperson said.
The company posted a second quarter profit of Rs. 16.6 crore against a loss of Rs. 15 crore in the same period last year, the latest financial results approved by the board on Monday showed.
Shares of EIH Ltd jumped 2.79% or Rs. 2.55 to reach R94. With market capitalisation of Rs. 5,372 crore it moved ahead of Indian Hotels at Rs. 5,282 crore.
In the EIH’s last annual general meeting Oberoi, had said EIH would team up with RIL.
“In all probability we will develop the Bangalore and Goa projects in association with RIL,” Oberoi had said. The investment could be between Rs. 500 and Rs. 700 crore, according to industry estimates.