PE firm to invest in Leela

Industry sources said the PE firm is most likely Blackstone. “Leela and Blackstone have been in talks for a while,” they said. This would be one of the biggest private equity investments in an Indian company.

Speaking to TOI, chairman of the Leela Group, Capt C P Krishnan Nair confirmed the investment. “We have got close to Rs 5,000 crore worth of funding, which will be spent on our ongoing projects and for expansion purposes,” he said. But he declined to divulge the name of the PE firm or state how much equity dilution had taken place.

Leela has four properties across the country and has six more in the pipeline – in Chennai, New Delhi, Hyderabad, Pune, Udaipur and Jaipur.

Its New Delhi property, for which the company acquired three acres of land for Rs 600 crore a couple of months ago, will be built at a cost of Rs 900 crore. “This will be the company's largest spend on a single property,” said Capt Nair.

Leela also has plans to diversify into an altogether untapped market – religious destinations, in which the organised sector constitutes only 10%.”We will launch a second chain of 5-star luxury hotels called Leela Gardens, which would come up in religious/devotional cities,” said Capt Nair.

Temple towns and devotional destinations like Mysore, Mookambika, Gokaran, Haridwar and Viashnodevi are being looked at. There are over 150 million domestic devotional travellers in the country, constituting close to 45% of the domestic travel market.

“Leela Gardens won't be as grand as our palaces and resorts. Its USP would be its lavish floral gardens,” he said.

The company's expansion drive will also see the development of standalone IT parks in Calicut, Mangalore and Mysore.