(IHCL), one among the country’s largest hotel players, will begin with a Rs 3,000 crore rights offering , making it the most important fund-raising activity by the Tata Group company within the recent past.

The issue will meet the company’s financing needs for cost , growth plans and debt repayment. a gathering of the board of directors was persisted August 23. The last rights offering that IHCL did was in 2017 for Rs 1,500 crore.

“We would really like to tell that the Board of Directors of the corporate at its meeting held today has, considered and approved, subject to receipt of relevant approvals from regulatory authorities, issue of equity shares by way of a rights offering to the prevailing shareholders of the corporate on a record date for an amount not exceeding Rs 3,000 crores,” IHCL said.

IHCL’s net debt ballooned 67 percent to Rs 3,110 crore by the top of FY21 as against Rs 1,857 crore reported in FY20, as per the company’s presentation.

Earlier in August IHCL disclosed plans of raising of long-term funds not exceeding Rs 250 crore by way of secured or unsecured long-term financing.

“The objective of the rights offering is to satisfy the company’s financing needs for cost , growth plans and debt repayment and can be finalised in consultation with the merchant bankers. The board also approved the formation of a Committee of Directors for the said rights offering to make a decision on the terms and conditions of the rights offering including the rights entitlement ratio, the difficulty price, record date, timing of the rights offering and other related matters,” IHCL added.

Taj Hotels and Resorts, the premier brand of IHCL, is getting to expand its portfolio of properties by 36 percent to 300 within the next 3-5 years, a serious chunk of which can come up under its asset-light strategy where it’ll not invest its own funds but take readymade hotels under its fold for operation.

This expansion will add about 80 properties for IHCL that currently has a listing of 221 properties including 150 operational ones in India, 21 abroad and 50 within the pipeline.

By the top of subsequent 3-5 years IHCL will have 46 percent of its properties under the management contract, 36 percent held by group companies and 18 percent under company , consistent with a recent presentation made by IHCL.