Banknotes issued prior to 2005 to be withdrawn: RBI Advisory

The Reserve Bank of India on January 22, 2014, advised that after March 31, 2014, it will completely withdraw from circulation all banknotes issued prior to 2005. 

In a note on its website, RBI said that from April 1, 2014, the public will be required to approach banks for exchanging these notes. Banks will provide exchange facility for these notes until further communication. 

The Reserve Bank further stated that public can easily identify the notes to be withdrawn as the notes issued before 2005 do not have on them the year of printing on the reverse side. (Please see illustration below)

 The Reserve Bank has also clarified that the notes issued before 2005 will continue to be legal tender. This would mean that banks are required to exchange the notes for their customers as well as for non-customers.

From July 01, 2014, however,  to exchange more than 10 pieces of Rs 500 and Rs 1,000 notes, non-customers will have to furnish proof of identity and residence to the bank branch in which she/he wants to exchange the notes.

The Reserve Bank has appealed to the public not to panic. They are requested to actively co-operate in the withdrawal process.

Ranbaxy's biggest bulk drug unit under US FDA scanner

This story first appeared in DNA Money edition on Tuesday, January 14, 2014

Troubles do not seem to end for Ranbaxy Laboratories, which saw its shares tank 9.47% on Monday after one of its key facilities at Toansa, Punjab, was slapped with Form 483 by the US Food and Drug Administration (FDA).

Form 483 is issued at the conclusion of an inspection when investigators observe any conditions that in their judgment may constitute violations of the Food Drug and Cosmetic Act and related Acts.

The shares of Ranbaxy, the biggest Indian drugmaker by sales, opened at Rs 466 on Monday and reached a low of Rs 420 before closing the day at at Rs 438.80,  down 5.58% from the previous close.

This is the second biggest fall since September 2013 when the stock had lost 30.27% of its value following an import alert on its Mohali plant by the US FDA for violation of current good manufacturing practices.

In a note to the exchanges, Ranbaxy said, “It is assessing the observations, and will respond to the US FDA in accordance with the agency’s procedure to resolve the concerns at the earliest.”

While Ranbaxy management did not share any production related details, industry experts said the plant manufactures around 70-75% of its API requirements.

Under the Form 483 process, the company would now have to respond with its corrective action plan and implement it expeditiously or face an import alert.

Sarabjit Kour Nangra, vice-president, research-pharma, Angel Broking, said, “During the second quarter of calendar year 2013, its other key facility at Mohali came under US FDA import alert. With this plant also under scanner, it would have impact on the operations of the company in the US, unless it can compensate for the same at the earliest and mange a smooth supply of key raw materials,” said Nangra.

She said more clarity is awaited from the Ranbaxy management in order to ascertain the exact impact on the financials, especially operating profit margins.

“Until then, the company could trade at a huge discount to its peers,” said Nangra.

Getting US FDA clearance will be crucial for Ranbaxy considering all of its India-based factories are currently banned by the regulator from exporting medicines to the US, its largest market.

Last week Ranbaxy inked a licensing pact with EPIRUS Switzerland GmbH for BOW015, a biosimilar version of Infliximab, prescribed to treat rheumatoid arthritis, and said the product will be introduced in India and other emerging markets.

Ranjit Kapadia, senior vice-president - pharma, Centrum Broking, said the molecule has only completed Phase 3 studies. “It would take 12-18 months to get regulatory approval and commercialise the product in India,” he said.

Will Wockhardt turn rocket for its lone Mutual fund believer?

My colleague Nupur Anand is the lead writer of this story appearing in DNA Money edition on Monday, Janart 13, 2014.

Last time when the Wockhardt shares shot up a whopping 350% was in 2012 after the drug firm successfully came out of debt restructuring.

This time buffeted by issues with the US Food and Drug Administration, the stock is again in doldrums -- between April and December it lost 83%, down to a new low of Rs 339.85 from Rs 2,024.90 at the start of the fiscal.

And now rooting for an encore is Prashant Jain, chief investment officer of HDFC MF, India’s largest fund house, who known for taking contra calls and unusual bets that have paid off.

As Wockhardt stock nosedived, several retail investors and mutual fund houses started dumping it.

In the same period, Jain quietly picked up the pharma firm’s shares.

Till April last year, HDFC MF had zero shares of Wockhardt, whereas other mutual funds held 10.34 lakh shares.

By September end, HDFC has 13.59 lakh shares, a whooping 97% of the total shares held by mutual fund houses.

Out of the total 1.36% shares of Wockhardt held by MFs, Jain alone holds 1.29%.

Under Jain’s watch, the asset under management of HDFC MF have grown to mammoth size of Rs 108,990 crore.

And market experts believe that this contra call by Jain may pay off.

An expert with a foreign brokerage said, “The rationale behind Prashant Jain’s optimism has to do with his philosophy on finding deep value stocks which he can hold, and expect higher value to unravel when it tides through difficult times. To me, the recent stock correction factors a worst-case scenario.”

A pharma analyst from a leading domestic brokerage added, “Fundamentally, despite trouble with US FDA, the residual business would have enough earnings power to justify current price. The current balance-sheet health is much stronger than ever, and hereon there can only be upside to earnings outlook. The kind of turnaround Prashant Jain has seen in Aurobindo could be something he is betting on in case of Wockhardt, once the regulatory issues are tackled.”

Bad times for Wockhardt started in May after the USFDA put an import alert on its Waluj plant and intensified between May and November, when the company being hauled up four more times by the US and the UK drug regulators.

Sarabjit Kour Nangra, VP-research, pharma, Angel Broking also believes that Jain’s bet may pay off.

“The Wockhardt stock took significant beating last year and has probably gone through the worst times. But one needs to also take into account that the company successfully came out of the financial mess in the years before that and Jain is certainly betting on its revival from the US FDA and UK Medicines and Healthcare Products Regulatory Agency issues,” said Nangra.

“One also needs to remember that Wockhardt is one of the biggest players in the pharma industry and investors with a long-term view would certainly take exposure as the risk-reward is huge,” she said.

Wockhardt stock has been recovering slowly and is now trading at Rs 424.95, already up 25% from the December low of Rs 339.85.

Wockhardt’s foreign drug regulator alerts

May 2013 - US Food and Drug Administration import alert on Waluj Plant

July - UK Medicines and Healthcare Products Regulatory Agency (UK MHRA) import alert on Waluj plant

Oct - UK MHRA withdraws Good Manufacturing Practice (GMP) certificate for Daman plant

Oct - UK MHRA withdraws GMP for Chikalthana plant

Nov - US FDA import alert on Chikalthana plant

Dec - US FDA import alert on Chikalthana and Waluj units for veterinary drugs

Now, IHCL aligns its United Kingdom hotels with Taj brand

This story first appeared in DNA Money edition on Wednesday, January 08, 2014.

Indian Hotels (IHCL), Tata’s hospitality business vertical, has rebranded two of its hotels in the United Kingdom (UK), aligning them with its luxury positioning in the international hospitality market.

The UK hotels will now be promoted within the Taj group’s portfolio of luxury hotels, resorts and palaces.

Taj management said it now has sole ownership and management, as well as operational and marketing control, of both properties.

The over a century old Crowne Plaza London - St James, a property located in central London and featuring 340 guestrooms and 21 suites, has been renamed St James’s Court, a Taj Hotel. While the published rate for a standard room at this hotel is £495 (around Rs 50,500) for a night’s stay, the best available rate as shown on its website is £119 (Rs 12,100) including the value-added tax or VAT.

Similarly, 51 Buckingham Gate, Taj Suites & Residences (pictured, below; 86 luxury suites and residences) has been re-branded Taj 51 Buckingham Gate Suites and Residences. With a published rate of £720 for a base category room, the hotel’s website shows £360 and £324 as best available and early bird (non-refundable) rates for a night’s stay.

Raymond Bickson, MD and CEO of the Taj group, said that the rebranding comes at an exciting time for the increasing strategic links between India and the UK. “We are delighted to have the opportunity to restore these iconic hotels that have more than a century of heritage.”

Deepa Harris, senior VP-global sales and marketing, the Taj Group, said that the success of the two London hotels has provided impetus to consolidate Taj’s brand presence in the UK, an important source market where the Tata group has had a presence for over a century, and is now the UK’s largest manufacturing sector employer and one of its largest foreign investors.

Both hotels have undergone phased renovations at considerable (but undisclosed) investment from the Taj group.

Taj will add to the Tata brands portfolio in the UK that includes Jaguar, Land Rover, Tata Steel Europe (formerly Corus) and Tetley Tea.

Mylan ropes in Biocon honcho Bamzai

This story first appeared in DNA Money edition on January 03, 2014.

Post the US parent Mylan Inc accomplishing the $1.75-billion acquisition of Agila injectables businesses from Strides Arcolab in December last year, the Indian subsidiary is now understood to be getting on board a top-notch pharma industry veteran to lead its Indian business activities.

Touted to be taking up a leadership position with Mylan India is Rakesh Bamzai, (pictured) who recently quit as president of Bangalore-based biopharmaceutical company, Biocon Ltd, after 19 years of association.

“He (Bamzai) is joining Mylan India,” confirmed an industry source familiar with the move.

Bamzai could not be reached for a comment on this move, while Mylan India did not respond to a email seeking confirmation on the same.

While details about the leadership position at Mylan India is still unknown, industry sources say it could very likely be a similar position Bamzai held at Biocon or possibly a higher management position.

Interestingly, in a notification to the exchanges, Biocon had said that Bamzai has decided to leave the organisation to accept a new leadership role.

“Rakesh has decided to take up a very senior and challenging leadership assignment,” said Kiran Mazumdar-Shaw, chairperson and managing director, Biocon.

Media reports had indicated that Bamzai was widely considered to be the next chief executive officer (CEO) of Biocon despite the fact that the biopharmaceutical company was going through a process of extensive reorganisation.

Mylan Labs’ current CEO and managing director, B Hari Babu, has been associated with the company since May 2001.

Hari is responsible for all of Mylan Labs’ operations including research and development, active pharmaceutical ingredient (API) and finished dosage production, supply chain management, environmental health and safety, sales and marketing, human relations and finance.

Mylan Labs is one of the world’s largest manufacturers and suppliers of over 150 APIs.  

Among a wide range of therapeutic categories being catered to by Mylan include antibacterials, central nervous system agents, antihistamine/anti-asthmatics, cardiovasculars, antivirals, antidiabetics, antifungals, proton pump inhibitors and pain management drugs.

Update from Mylan Inc.

Mylan Inc (Nasdaq: MYL) announced that Rakesh Bamzai has joined the company and has been appointed president, India Commercial and Emerging Markets.

Bamzai has more than 20 years of experience in the Indian and global biopharmaceutical industry. Prior to joining Mylan, he was president of Marketing at Biocon, where he played a key role in building the company's global biopharmaceutical business. He had overall responsibility for active pharmaceutical ingredients (API) and branded formulations and managed a team of more than 2,000 people across functional areas and geographies.

Through the years, he also spearheaded many strategic partnerships that enabled the organization to gain wider global access and greater market penetration for its biopharmaceuticals business. Bamzai also led Biocon's foray into branded formulations and built many successful brands across therapies in India and Gulf Cooperation Council states.

Mylan President Rajiv Malik commented, "We were extremely pleased when Rakesh asked to join our company. Many of us at Mylan have had a firsthand opportunity to work with Rakesh over the course of our strategic partnership with Biocon and have observed his strong business and marketing acumen, his strategic insight and outstanding leadership skills. In this new role overseeing all of Mylan's commercial operations in India and emerging markets, we believe that Rakesh will add significant value to Mylan."

Bamzai said, "I have had the privilege of collaborating with Mylan during my time at Biocon, and I am excited about the significant opportunities I see for the company in India and other emerging markets. I believe Mylan's commitment to quality and to setting new standards for innovation, reliability and service for patients and physicians in India will further distinguish Mylan from its peers. I look forward to supporting Mylan's continued expansion and differentiation in these exciting growth markets."

Bamzai graduated from the University of Mumbai (Department of Chemical Technology).

Fairmont Raffles looking to wind up India operations

A version of this story first appeared in DNA Money edition on January 01, 2014.

Canadian hotel company Fairmont Raffles Hotel International (FRHI) is considering winding up its India operations as the cost of operating a hotel management company in India is becoming unviable, industry sources said.

It may re-enter when overall environment gets more conducive for business, they said.

“The hotel management company has begun giving out feelers to asset owners on its plans to withdraw from India. A communication has been sent out by the company to hotel asset partners with whom it has signed Letters of Intent for future launches expressing its intentions. The same is true for its operational properties, too,” said an industry source privy with the development.

It is also learnt that FRHI has already shut its development office in India and has moved some of the staff to its Dubai office. The development office typically identifies and initiates discussions with hotel asset owners and enters into LoIs and management contracts.

“However, slowdown in development activities forced the hospitality firm to relocate operations,” said another source.

FRHI, however, denied all market talk of its India exit.

In an emailed response, the hotel operator said, “FRHI Hotels & Resorts continues to view India as a core strategic market and we look forward to growing our presence in the country in the future. We have enjoyed a very successful entry into the market with Fairmont Jaipur, and remain fully committed to operating in this key domestic market. Additionally, we see the Indian market as critical not only for our growth in India but also for outbound travel to our hotels globally.”

Fairmont Raffles Hotel International is a global operator of hotels in the five-star luxury category with brands like Fairmont, Raffles and Swissotel with more than 100 properties. 

The company had entered India in 2010-11 with plans to operate 40 hotels in five years. The plan was to operate up to six hotels under Raffles brand, about 8 to 12 under Fairmont and around 20 Swissotels under management contract in India, a top official had said then.

However, it has only two operational hotels so far -- one each under Fairmont (Jaipur) and Swissotel (Kolkata) brands. Its third brand Raffles is yet to debut in the market.

Its Swissotel branded five-star deluxe resort at Calangute in Goa was deflagged (within six months of the launch) in September 2013.

The development pipeline had two more hotels under the Swissotel brand in Gurgaon/Noida and Bangalore (Whitefield) that were to be operational in 2013 – the Swissotel website now has 2015 and 2016 as the year of launch.

Similarly, work on a Swissotel property at Mumbai's Andheri-Kurla road area has been stalled for almost a year now and is unlikely to meet the 2015 launch date. The fate of Fairmont branded hotel in Hyderabad is uncertain as well.

Sun Pharma's Sudhir Valia picks 1.41% stake in Ranbaxy Labs

Sudhir Vrundavandas Valia, who is executive director with Sun Pharma, has picked up 1.41% stake in Ranbaxy Laboratories. The stake was bought by Mumbai-based Silverstreet Developers Llp in which Valia is partner.

Approximately 59,67,542 valued at a little over Rs 247.65 crore (average share price at Rs 415 for the December quarter) are being held by Silverstreet according to shareholding pattern released by Ranbaxy for the quarter ended December 2013.

Ranjit Kapadia, senior vice president - Pharma, Centrum Broking Ltd, said, "Sudhir Valia’s move seems to be that of  a strategic investor in the company from long-term perspective. From Sun Pharma point of view there is no change, as the shares have been acquired in his personal capacity."

In another development, Ranbaxy Laboratories has inked a licensing pact with EPIRUS Switzerland GmbH for BOW015, a biosimilar version of Infliximab, prescribed to treat rheumatoid arthritis. The product will be introduced in India and other emerging markets, Ranbaxy said in a statement.

Kapadia is of the opinion that the licencing agreement will help Epirus market its biosimilar in India through a large field force of Ranbaxy without setting up own field force and distribution channel. "However, the molecule has recently completed Phase 3 studies and it would take 12-18 months to get regulatory approval and commercialise the product in India," said Kapadia.

Zydus Cadila gets US nod for two drugs

Drug firm Zydus Cadila has received approval from the US Food and Drug Administration (USFDA) to market Sirolimus tablets 0.5 mg with 180 days of marketing exclusivity Sirolimus. As per the IMS data in 2013, the sales of Sirolimus 0.5 mg is estimated at USD 11.7 million and the total market for Sirolimus stood at around USD 203.8 million.

The Ahmedabad-based firm has also received USFDA approval to market Duloxetine delayed release capsules in different strengths of 20 mg, 30 mg and 60 mg. The sales for Duloxetine was estimated at USD 5.5 billion in 2013.

While Sirolimus tablets are immunosuppressant drugs used to prevent rejection in organ transplantation, Duloxetine delayed release capsules fall in the anti-depressants segment.

Only 10-15 lakh households in India can afford an apartment worth Rs 1 core: Shashank Jain, executive director, PwC

An version of this Q&A first appeared in DNA Money edition on Monday, January 06, 2014.

Shashank Jain, executive director, PwC India in conversation with Ashish K Tiwari speaks of the perils dogging the Indian residential realty sector and why the market is the way it is. Edited excerpts..

 

Unaffordable housing is said to be the key reason for lack of demand and oversupply scenario in key Indian metros. What is your take on it?

There are larger issues involved in terms of resolving this – not only with the developers but with the entire eco-system. Building affordable houses starts with two things, land and infrastructure and both go hand in hand. Land prices will always be high in places where infrastructure is already developed leading to significantly high starting input cost for the developer. So land cost in cities like Mumbai and National Capital Region (Delhi and Gurgaon) could form over 50% of the total project cost. And where the infrastructure is not developed, there are very few takers for the residential projects thus raising questions on their viability. So it's like a chicken and egg situation.

Unfortunately we haven't had a situation where both central and state governments have taken this pro-actively and have focussed on building infrastructure in a greenfield way – infrastructure has always played a catch-up role with urbanisation and development and not the other way round.

Residential market would pick up if you have a commercial catchment area in the vicinity. People would prefer buying into a residential project if their work place is close by as well. While a developer may build affordable housing, if the project is far away from the main city and if people have to travel over 2 hours one way to get to their place of work, the development will be a non-starter. So developing of commercial catchments is crucial for micro markets to pick up the way one would want it to happen.

A holistic approach with infrastructure, commercial, corporate and residential units around it is thus essential when developing cities and micro markets. All of it has to happen simultaneously.

But residential prices are unaffordable even in the extended suburbs of cities where there is very little or absolutely no infrastructure development.

I'd say that has also got to do with the availability / scarcity of resources (primarily land) and the situation is more severe in the Mumbai Metropolitan Region (MMR) because of its unique position / geographical layout.. However, if you look at the National Capital Region (NCR), it has expanded on all sides and offers housing across all price points. Similar is the case with Chennai or Bangalore markets which can expand horizontally. While it may not be completely affordable, one can possibly look at owning an apartment after stretching (finances) a bit.

Unfortunately, in India we are in a situation where if you look at from a developer's perspective, the input cost is so high that it makes the starting point unviable/unaffordable for the realtor as well. For a developer land is inventory and an essential resource for a long-term play of say 10-15 years or more. This means land prices have already seen significant appreciation at places where a common man would actually think of buying / residing. That's because the developer is thinking five to seven years ahead and focuses on acquiring land that may not be uninhabitable at present. So acquisition of land and development always plays a catch-up game and land prices are hence always ahead of the curve that way thus raising a big question on the affordability factor.

Also, income levels of potential home buyers haven't kept pace with the extent of increase in realty rates in the last 3-5 years.

That's correct. At max, salary levels on an average would have gone up marginally when compared to  overall inflationary increase. Leaving aside the exceptional cases, that's generally the kind of increments people would have got in the recent past. However, if you look at real inflation at the consumer level, it's far higher. So from a cash available to sustain I'd say it's a negative growth situation.

Now consider that scenario vis-a-vis developer's input cost for building a house, that's increasing year-on-year too. This is clearly evident from the fact that the primary market, which is is the key driver for affordability – where one can get into buying a house with lower capital requirement – is seeing an increase to the tune of 10-20% every year. Given the overall economic uncertainties of the last few years, salary levels certainly haven't kept pace with it and that definitely is a key challenge.

According to Apnapaisa.com estimates, a monthly income of over Rs 1.5 lakh is required to be able to purchase (through a home loan) a residential apartment worth Rs 1 crore. How many people in the working class would really qualify?

The National Council of Applied Economic Research (NCAER) and Centre for Macro Consumer Research do come up with such data. The last I recollect, there is a a bracket of households earning Rs 12.5 lakh and above and that number is just 1% of the total households. A quick math would reveal that if we are about 120 crore people and taking an average household size of five, then we are talking about 24-25 crore households in the country.

The reason I'm focussing on households is because buying a residential apartment is a household decision and not an individual decision. If 1% out of those many households are earning more than Rs 12.5 lakh annually we get a figure of 25 lakh households spread over the country. If we increase the Rs 12.5 lakh limit to say Rs 15-20 lakh I think it could be even half. So we are talking about only 10-15 lakh households who possibly be earning that kind of a money to afford an apartment worth Rs 1 core.

This profile of households would majorly be in the top four or five metros of the country that again brings back to your question about affordability. When people who can afford are concentrated in certain geographies, prices in such markets would shoot up. Which sort of makes it a vicious circle again, because wherever developers are building affordable housing people living there do not have the means to buy into such projects.

Another concern for home buyers is of the uncertainty in terms of delays / deliveries of housing projects be it in the city, suburbs or extended suburbs. It only adds to the dilemma (to buy or not to) and related sufferings.

Real estate is one of the few sectors wherein delays in a project execution actually gives more returns from a buyer's perspective. At a macro level, by making a booking and not paying for that owing to the project delay, I actually get an appreciation on the investment. That anomaly needs to get corrected at a macro level.

That anomaly could be true for the investor community. The end-user however is at the receiving end incurring rental and EMI expenses at the same time while fighting inflation...

I agree, the end-users are significantly impacted as a result of project delays. Unfortunately we are in a situation that in any project which gets launched, I'd think majority of the buyers are not end-users. It's a vicious circle. The investors are indifferent to any delays in the project as it helps them get better appreciation.

In fact, the registration numbers that get released every quarter, I'm told a large proportion of it is secondary sales.

The other related parameter in my opinion, is that in any micro market, if the secondary rates are Rs 1,000 to Rs 1,500 per square foot lower than what the developer is offering, that's a clear sign of an overheated market. Why would any project that's at an advanced stage of construction be sold at a lower rate as compared to a fresh launch? This is a clear indication that there aren't many takers in the market for projects that are significantly constructed and that clearly is an investor driven market.

But investors continue to drive the residential realty market thus giving the developer that much required initial cash flow.

There are two types of investors, one is the business community with element of unaccounted surplus being parked in the real estate sector. The government is trying to control it by imposing tax deduction at source (TDS) of 1% for an amount of Rs 50 lakh and more. Secondly, a significant chunk of investment is made by white collar executives especially in the metro micro markets. by This class of investors is putting their surplus income in second or third home and they don't have exit pressure. They have a steady stream of monthly income that helps support second or third home thus giving them a significantly higher holding power. That again brings back to the question that prices will not come down significantly.

Are hotel owner-operator marriages becoming flings? Now Swissotel pulls out of Goa property

An edited version of this story first appeared in DNA Money edition on Monday, Sep 9, 2013.

With relationships between Indian hotel asset owners and international hotel operators getting sour, for various reasons, the Indian hospitality market is set to see an increase in the instances of such marriages hitting a rocky patch.

Emulating the split between Phoenix Mills and Shangri-La Hotels that happened last week, another foreign hotel operator has decided to call it quits.

This time it is Zurich-based Swiss hospitality chain Swissotel Hotels & Resorts which is pulling out of its five-star deluxe hotel at Calangute in Goa. The Goa property is owned by Bangalore-based Convention Hotels India Pvt Ltd (CHI).

Officials of both CHI and Swissotel could not be reached for a comment.

However, Swissotel’s website confirmed the development saying, as of September 9, 2013, Swissotel Hotels & Resorts will no longer manage Swissotel Goa. The hotel will be renamed and operated by the owner.

The international hotel chain -- Swissotel -- is owned by FRHI Holdings Limited, a leading global hotel company with 102 hotels and resorts worldwide under the Raffles, Fairmont and Swissôtel brands. The company also manages Fairmont and Raffles branded Residences, Estates and luxury private residence club properties.

Interestingly, Swissotel Goa was launched amidst great fanfare just six months ago i.e. March 2013 and, in most likelihood it is the shortest owner-operator marriage the Indian hospitality market has seen thus far. The fling between Phoenix Mills and Shangri-La Hotels had lasted nine months.

Convention Hotels is currently developing four hotels in the country with a combined guestroom inventory of 715 keys. The company’s development pipeline includes a 35-room tented resort is under development at Kabini (Bangalore), a 220-room Holiday Inn hotel in Goa to be managed by Intercontinental Hotel Group (IHG), a 200-room Hilton Garden Inn to be managed by Hilton Worldwide and a 260-room Hyatt Place hotel in Bangalore that will be managed by Hyatt Hotels & Resorts.

Industry experts said the Indian hospitality market will see many more asset owner-hotel operator relationships turning sour, citing conflict of opinion (on business operations and expected returns on investments) as the key reason for the split.

Another possibility of a fall-out, industry sources said, will be between Shiva Satya Hotels which is developing a five-star hotel to be managed by IHG under its Crowne Plaza brand. The duo had signed a management agreement back in August 2008 and the hotel was to be operational in 2010. However, the project has got delayed significantly and there is no clarity on its completion timeline as yet.

Information Update:

Before launching under the Swissotel brand, the management contract for the Goa resort was signed with the InterContinental Hotel Group and was to be operated under the Holiday Inn Resort. However, Swissotel came in at the last moment and bagged the management contract.

As of now, this flagship hotel from the Bangalore-based Convention Hotels India Pvt Ltd (CHI) has been re-branded as North16Goa.

Hoteliers add over 800 guestrooms across India in two weeks

This story first appeared in DNA Money edition on Thursday, Sep 5, 2013.

The current financial environment may remain tough, but that has not deterred Indian hospitality industry – both Indian and international – from pushing ahead with new hotels. In all, approximately 827 new guestrooms were added in the organised hospitality sector in the last two weeks and a majority – approximately 60% – of them have come up in South India alone.

Some of the big names here include Indian Hotels Co (Taj Group), East India Hotels (Oberoi Group), Accor, Berggruen Hotels and the Panaromic Group.

While French hospitality major Accor opened a 131-room budget hotel under the ‘Formule1’ brand in Bangalore, IHCL from the Tata stable rolled out its 200-room upscale ‘The Gateway Hotel’ on the IT Expressway in Chennai. September thus far has seen three hotels being launched with a combined guestroom inventory of 496.

Earlier this week (September 2), the Oberoi Group threw open its 323-key five-star business hotel under the Trident brand in Hyderabad. Berggruen Hotels, promoted by US-based Berggruen Holdings, opened its first five-star hotel in Pune under the Keys Klub brand featuring 115 guestrooms while a 58-room premium hotel got christened United 21 in Hyderabad.

While it may appear as a sheer coincidence that almost half-a-dozen hotels have entered the Indian hospitality market at around the same time, experts said most of the projects have been under development for some time now. “Hotel chains ideally like to time their new launches and September being the shoulder month it makes for a sensible move. The Indian hospitality sector will enter the peak business season starting October going up to January/February and launching at this time will help them tap incremental business,” said Ashish Bharadia, senior consultant, Mahajan & Aibara Management Consultant.

There is unanimity that coming months will see more additions from the likes of Marriott, Starwood, Accor, Hyatt and IHCL.

For instance, Marriott International is set to open its account for its 297-room five-star deluxe JW Marriott hotel in Bangalore this month. Another 510-room JW Marriott hotel is slated to take off inside the DIAL Hospitality District in New Delhi. Marriott will also open a few Courtyard by Marriott branded hotels with a total inventory of 350-odd in cities like Bilaspur (104), Pune (180) and Agra (150), in addition to a 150-key Fairfield by Marriott in 2013-14.

Similarly, for Accor, it’ll be a 104-room Formule1 and 223-room Novotel hotel each in the Pune hospitality market this calendar year. Two more Novotel hotels, one each in Ahmedabad (180 room) and Goa (150 room) are likely to hit the market in 2013.

A 167-room Hyatt Regency is currently under construction in Ludhiana and projected to go live this year. Starwood Hotels and Resorts will take the curtain off a 323-room five-star hotel in Kolkata under the Westin brand and a 126-room Le Meridien hotel in Mahabaleshwar. Hilton Worldwide is in the process of opening DoubleTree by Hilton hotels in Jaipur (179), Bangalore (172), Pune (115) & Agra (102) and a Hilton Residences in Bangalore (243 rooms) in 2013.