Investment major Goldman Sachs recently made a significant acquisition (via ET)when it acquired stakes in the up and coming hotel development and investment start-up SAMHI Hotels. The 441-crore investment is particularly important when you consider that SAMHI had raised close to ₹900 crore, over the past four years.
While the company is currently keeping mum on the topic of the stakes it off-loaded to Goldman Sachs, its filing with the Registrar of Companies shows that the transaction involved a sale of fresh equity shares.
Speaking on the topic, Ashish Jakhanwala, founder and CEO of the 16 Hotels strong chain said
This year, we want to expand our portfolio through acquisitions and the investment will be entirely used for growing the business. Our existing projects — operational and under development — are fully funded and this money will be deployed for fresh acquisitions.
Investments are certainly something the company is good at. The five year old company has built up its business on a string of acquisitions across major Indian cities and has partnered up with global operators including Marriott, Starwood Hotels, AccorHotels and Hyatt for its rebranding campaign.
The fresh influx of money will lead to significant expansion upon the chains part. The 10 new hotels SAMHI is planning to to acquire in the next 12 to 18 months will enable the company to take its presence up to 26 hotels with 3,900 rooms under a total of five brands.
From the perspective of Goldman Sachs, the acquisition takes the amount of funds it has tied up as investments in India, upto $2.5 billion. The spectrum about which the said funds are distributed, spans across a variety of categories including renewable energy, healthcare, logistics, food and beverages.
Speaking on the investment Sonjoy Chatterjee, Chairman, Goldman Sachs India, said
On the back of reform momentum, India is witnessing a steady recovery in economic activity driven by domestic demand. We anticipate this to lead to an upturn in the hotel sector. This investment is consistent with our strategy to invest in sectors and infrastructure that assist in the continuedgrowth and development of India.
Upturn is about the right word. As the economy slowly recovers, investors are slowly regaining confidence in in the sagging hotel industry. As per hotel consultancy firm HVS, hotel occupancy in India crossed 60% for the first time in four years! These figures may definitely have something to do with the confidence gain and if Goldman Sach’s SAMHI acquisition is any indication, expect more interest from others in this quarter soon.