Indian Hotels Company Ltd

Transaction overview

• IHCL boards approve the scheme to merge OHL into IHCL.
• OHL stake: IHCL holds 37.1%.
• OHL shareholders receive 25 IHCL shares per OHL share.
• All-stock deal; net issuance ~2.32 crore IHCL shares; ~1.6% dilution.
• Swap IHCL:OHL = 1:4.68.
• Targeted merger completion in FY28; consolidation date 1 Apr 2027.

Portfolio impact & capacity

• 7 hotels to IHCL standalone; includes 3 freehold properties.
• Total operating keys: 2,104 pre-merger; 2,100+ post-merger.
• Southern India: 2,104 keys across TN/KA/KL.

Strategic rationale

• Simplify group structure and increase stake in key group companies.
• EPS accretive from year 1; enhanced revenue and profitability.
• Asset management opportunities enabled by combined portfolio.

Governance & timing

• Board approvals secured; forward filings aligned with scheme timeline.
• 1 Apr 2027 appointment date for financial consolidation; FY28 completion target.

Merger overview

• IHCL and Oriental Hotels will merge via Scheme of Arrangement, subject to statutory approvals.
• Share exchange ratio set at 25 IHCL shares for every 117 OHL shares; all-stock transaction.
• Appointed Date for the merger is 1 April 2027.
• Completion targeted in the second half of FY2028.
• Two new operating subsidiaries will be created to streamline governance and overheads.
• OHL portfolio comprises seven hotels with 825 rooms.
• Advisors named for valuation and fairness opinions; SSPA & Co. acted as OHL's adviser.

Key terms and approvals

• Board approved Scheme of Arrangement on Aug 24, 2026.
• Scheme under Sections 230–232 of Companies Act 2013.
• Share exchange: 25 IHCL shares for 117 OHL shares.
• Arm's-length consideration; valuation dated Aug 23, 2026 by PwC-SSPA & Co.
• Fairness opinion dated Aug 23, 2026 by Kotak Mahindra Capital.
• Post-scheme, IHCL promoter stake 37.50%; public 62.50%.
• Transferor (OHL) is an associate; IHCL holds 37.05% as of Jun 30, 2026.
• Subject to NCLT sanction and regulatory approvals (stock exchanges, SEBI).
• Rationale: synergies, consolidation, cost reduction, and growth enablement.

Property tax penalty update

• Additional penalty of Rs 5,51,35,972 on 2026-27 property taxes for Taj Lands End Mumbai.
• Total penalties on outstanding property taxes now Rs 103,08,31,312.
• There have been no violations; the bills are being disputed.
• Date of receipt of order: August 12, 2026.
• Financial impact will be as disclosed in Point 2; no operational impact.

ESG rating update

• SES ESG Research assigned ESG rating of 77/100 to Indian Hotels Company Ltd.
• Company did not engage SES ESG; rating prepared independently.
• Based on FY2025-26 data available in public domain.
• Rating information published on the company's website.
• Information received on 27 July 2026.

Financial Performance

• Consolidated revenue 2,419 cr; YoY +15%; EBITDA 753 cr; YoY +18%; EBITDA margin 31.1%.
• PAT up 21% YoY to INR 358 crores.
• Standalone revenue 1,298 cr; EBITDA 542 cr; margins 41.8%.
• Hotel segment revenue grew 17%; domestic RevPAR grew 14%.
• Taj brand value up 38% to about $900 million; Brand Finance names Taj strongest brand fifth time.
• Portfolio: 20 hotels signed, 11 opened; 382 operating, 265 in pipeline; ~650 hotels.
• Management fee income up 26% to INR 168 crores; headwinds from Dubai/Sri Lanka.

Brand, Portfolio and Growth

• Hotel margins 32.6%; ~INR 15 cr preopening costs for Frankfurt and TajSATS kitchen.
• Asset upgrades completed at Taj Palace, President, Taj West End, Taj Fort Aguada with 300+ rooms.
• Taj Ganges Banaras 100-room wing commissioned; PBT positive in first quarter post-launch.
• 20 hotels signed, 11 opened in Q1; 382 operating, 265 in pipeline; portfolio near 650 hotels.
• Growth brands Ginger, Qmin, Ama, Tree of Life deliver robust performance; Ginger revenue 183 cr; 20% YoY; margin 39%.
• Qmin 100+ outlets; Ama 380+ bungalows, 196 operating; Tree of Life 40+ resorts, 23 operating.
• Brij acquisition revenue INR 11 cr in quarter; 4 more hotels scheduled to open this year.
• Atmantan revenue INR 19 cr; governance in Hyderabad for a managed wellness resort.

Projects, Capex and International Expansion

• Taj Bandstand: 700 bays, ~450 keys; commissioning 2030–2031; revenue target ~INR 1,000 crores.
• Kruger National Park: first of three lodges opened; two more in 12 months.
• International expansion to be capital-light; leasing with rev-share in Switzerland, Singapore, London.
• Upcoming openings include Ginger Bangalore Airport, Mopa Ginger; 350-room Vivanta; Kolkata Ginger.
• Frankfurt project: revenue impact starts September; preopening costs already reflected.

Cash, ESG and Sustainability

• Gross cash reserves exceed INR 4,400 crores; liquidity to fund upgrades and expansions.
• ESG Paathya: 41% energy from renewables; 350 EV charging stations across 170 locations.
• Water recycling at 54%; 83 skill centres; 55,000 youth trained; target 100,000+ by 2030.
• States offering up to 30% capex subsidies; leveraging subsidies and long leases.

Guidance and Outlook

• Expect double-digit revenue growth with sustained margins; strong cash generation; improved earnings quality.
• Portfolio target crossed 650 hotels; current ~645; aim to cross this month.
• Q2 momentum is positive; Q3 and Q4 historically strong for leisure demand.

Q&A Highlights

• Demand trends: domestic leisure strength; international travel volatile; MICE recovery expected in H2.
• July performance ahead of Q1; Q2 likely to exceed Q1 if trends persist.
• Frankfurt impact: revenue recognition starts September; preopening costs already charged.
• Bandstand timeline clarified: 450 keys; 700 bays; commissioning 2030–2031.
• Kruger lodges: 1 opened; 2 more within 12 months; expansion aligned with premium wellness.
• M&A: ongoing dialogues; focus on revenue-share conversions; large asset purchases not imminent.

Meeting Details

• Date and time: Tuesday, July 21, 2026 at 19:00 IST.
• Type and mode: group earnings conference call, virtual dial-in.
• Event/organiser: IHCL Global Conference Call post-Q results.
• Key participants: Senior Vice President & Company Secretary.
• Purpose: discuss Q1 FY2026-27 results with analysts/investors.

Meeting Details

• Board meeting on July 21, 2026 to approve unaudited standalone and consolidated results for June 30, 2026.

Key Agenda Items

• Approval of unaudited (reviewed) standalone and consolidated financial results for the quarter ended June 30, 2026.

Other Notes

• Trading window closed from June 24, 2026, until 48 hours after results declaration.