BHI launched the hotels business 11 years ago committing capital of $75 million with approximately $62 million invested until 2013
New York-based billionaire Nicolas Berggruen is investing $50 million (approximately Rs 323 crore) across business verticals in India during the financial year (FY) 2018. Berggruen Holdings India (BHI) which has been operating in the country for 11 years now is envisaging an upcycle in the businesses it owns and is looking to capitalise on the opportunity with this investment to scale up operations.
Speaking with DNA Money, Kabir Kewalramani, managing director, BHI, said, the proprietary investment firm is almost doubling investment across its businesses in India. "Approximately $50 million has been committed for various businesses in this fiscal. A majority of the chunk will go towards scaling up the hospitality vertical operational under Berggruen Hotels. Equipment-rental business gets a small round of funding to the tune of $3 million. And the balance will get consumed between properties, car rental and education businesses," said Kewalramani.
BHI launched the hotels business 11 years ago committing capital of $75 million with approximately $62 million invested until 2013. Thereafter, Berggruen Hotels went into a restructuring mode. It was only in the January to March 2017 quarter that it was able to draw down a tranche of around $10 million after Nicolas Berggruen, chairman, Berggruen Holdings opened up to the idea of making additional capital available for the business.
According to Kewalramani, the investment firm has already infused $80 million and with another $30 million coming in by mid-June this year, the total investment in the hospitality business will reach a figure of $110 million in FY18.
Elaborating on the deployment plan, Anshu Sarin, CEO, Berggruen Hotels P Ltd (BHPL), said, money will be spent on bringing strategic assets under the portfolio apart from various other activities. "Let's say there is a great hotel we could get on a lease, or there is a brownfield hotel that needs to be explored for a potential management contract.
"We will explore such opportunities that may require putting cash upfront to bag the deals. Having said that, we will not look at greenfield assets anymore," said Sarin adding that some money has also been earmarked for marketing and branding activities, bringing in technology and building the management contract portfolio.
BHI, in the year before last, started seeing green shoots in the performance of its businesses. While the focus was on consolidation last year, it has now shifted towards scaling up in the next few years.
"We are unlike any other investment hub considering we own quite a few business platforms in our portfolio now. This year, the idea is to use the platforms to do other stuff. So, the key is to try and add different businesses within these platforms and scale up," said Kewalramani.
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