Taj Mansingh Hotel, New Delhi (Source: Wikipedia
A day after the Delhi High Court paved the way for auction of the iconic Taj Mansingh, overlooking the operator’s plea to renew its licence, the Indian Hotel Company’s shares have not reacted. The BSE listed company opened in the green and gained 4% in trade. At 1.38 pm, the stock was trading at Rs 131, up over 4% to the previous close. The BSE Sensex is up 1%.
The 294-room property, located in Lutyens’ Delhi, is a key asset operated by the company and is estimated to bring annual revenues of Rs 150 crore. The company will participate in the auction as and when it is held, unless it decides to challenge the HC order. Also, others in the competition will turn active and aggressive while participating in the auction.
The Tata group company was seeking a renewal of licence on grounds of the equity investment it had made in the property. The initial cost incurred by the company before the hotel became operational in 1978 was Rs 4.61 crore. Additional investments would have gone to modernise the property.
Indian Hotels had got the property on lease from New Delhi Municipal Corporation (NDMC) for 33 years. The lease ended in 2011 and saw seven extensions on various grounds. The current extension is valid till September 30. However, the auction process will take much longer. NMDC has roped in SBI Cap, a subsidiary of SBI as the transaction advisor for the auction. Taj Mansingh is the third property in the capital where NMDC has won legal battle against operator on licence related disputes.