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ITC: Enduring Value

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ITC to invest Rs 25,000 cr in 5 yrs 15 Sep 2012

Business Standard

ITC Ltd has launched its super premium luxury hotel, ITC  Grand Chola, here. The hotel, which the company claims as the world’s largest  LEED Platinum rated, has come up with an investment of around Rs 1,200 crore.

Speaking to reporters, ITC chairman Y C Deveshwar said “We  have a target to invest around Rs 25,000 crore in the next five years, in  total. Whichever segment executes projects faster could get more money and the  hospitality segment is executing projects well.”

ITC recently acquired a five-acre land in Colombo, Sri  Lanka, to set up a hotel with an investment of around Rs 500 crore. It also has  plans to set up hotels in other neighbouring countries like Nepal and  Bangladesh, he added.

On the current market conditions for the luxury hotel  segment, he said the source markets were not in good condition. “We are  building hotels for the next 30-40 years and not looking at the market  conditions of next three or four years,” he said.

The company is coming up with its second hotel in Kolkata  and is also setting up facilities in Ahmedabad, Amritsar and Bhubaneswar.  Almost two years ago, the company announced it would invest around $2 billion  in the hospitality industry. So far, it has invested 25-30 per cent.

The company is also looking at adding 5,000 rooms to the  existing 8,000.

ITC expects an investment of Rs 1.5-1.8 crore for setting up  a luxury room and Rs 60-70 lakh for a room in a four-star facility, said Nakul  Anand, who heads the company's hospitality business. However, officials did not  reveal the investment for setting up the proposed 5,000 rooms.

Deveshwar said majority of the investment would be from  internal accruals, while a portion of it would come from borrowings.

ITC Grand Chola has come up on around 1.5 million sft and  has around 600 luxurious rooms and suites including 78 serviced apartments. The  hotel would also explore Meetings, Incentives, Conferencing and Exhibitions  (MICE) opportunities as a major vertical. It has a 100,000 sft of banqueting  and convention space and a 30,000 sft of pillar-less ballroom. The facility was  inaugurated by Tamil Nadu chief minister J Jayalalithaa.

Revenues from FMCG

ITC Ltd is looking  at increasing its revenues from the fast moving consumer goods (FMCG) segment  from current Rs 5,500 crore to Rs 15,000 crore in the next five to seven years,  said Deveshwar.

© ITC Limited