DS Group to expand hospitality biz

New Delhi, Apr 22: The 1,200-crore Dharampal Satyapal (DS) Group, primarily involved in the business of foods and beverages, is now expanding its wings in the hospitality sector and will invest over Rs 425 crore for its two projects in Kolkata and Jaipur.

After upgrading the 'Manu Maharani' hotel in Nainital, the DS Group plans to own eight properties by 2012.

It will set up a 250 room-five star hotel, a 100-room budget hotel, a convention center and a shopping arcade in Kolkata at an investment of Rs 300 crore.

The company infused about Rs 10 crore via internal accruals in renovating the Nainital hotel, but is now looking at other options like bank loans or private equity (PE) partners for raising funds.

''A PE partner is surely coming in who might be investing in the upcoming properties... As and when we need the finances, we will take the usual route,'' DS Group Managing Director Rajiv Kumar told UNI here.

The diversified group may tie-up with international brands for its expansion on a management contract basis, he said adding that the Kolkata project, spread over 7.5 acres, is likely to be operational by June 2010.

''We will launch three brands -- destination hotels, five stars and budget hotels. Our second project will be in Jaipur comprising a 5 star business hotel with 200 rooms and a shopping mall at a planned investment of Rs 125 crore,'' he said.

This four acres-land project is likely to kick off by September 2009. The company will also set up a luxury resort property in Udaipur, DS Group spokesperson Bhavna Sood said.

PE funds typically control management of the companies in which they invest, and often bring in new management teams that focus on making the company more valuable.

UNI