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Wednesday, June 21, 2006

Bharat Hotels to go slow on maiden float

Bharat Hotels is going slow on its maiden issue plan following the recent volatility in the equity markets reports Business Standard.

The company had filed its draft red herring prospectus, DRHP, on March 23, 2006, with the Securities and Exchange Board of India, Sebi.

Lalit Suri, chairman and managing director, said he was waiting for clearances from Sebi.

He, however, said the firm would adopt a wait-and-watch attitude before hitting the market.

Suri's outlook could be justified by the weak response generated by IPOs of those companies that got listed around May 18, the day the Sensex plummeted 826 points (6.76%) to close at 11391.

Air Deccan had to extend its IPO deadline by three days and slash the lower limit of its price band to Rs 147 from Rs 150-175.

Since filing the prospectus, Bharat Hotel executives said the company's valuation has gone up with the purchase of a four-acre hotel site in Chandigarh.

This land was bought in equal partnership with DLF for Rs 75 crore (Rs 750 million).

Also, the Rajasthan government has in principal agreed to allot three acres to Bharat Hotels in Jaipur.

In an earlier interview, Suri had said the company would require an investment of Rs 1,100 crore (Rs 11 billion) to expand its five-star luxury brand, The Grand, to Hyderabad, Amritsar, Jaipur, Chandigarh and Noida.

Of the total investment, Suri hoped to raise Rs 600 crore (Rs 6 billion) from an initial public offer and the remaining Rs 500 crore (Rs 5 billion) from 1:1 debt equity ratio.

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