M&M to dilute stake in resorts
Mahindra & Mahindra is planning to offload a part of its stake in its wholly-owned hospitality subsidiary Mahindra Holidays and Resorts India Ltd. M&M will dilute its stake in its resorts arm through an initial public offering (IPO). Mahindra Holidays own the Club Mahindra brand of resorts.
“The listing is basically to exploit its leadership position as well as to enhance its brand equity further and not for funds,” said Ramesh Ramanathan managing director, Mahindra Holidays.
“The Mahindra & Mahindra board has given its green signal and we hope the company will get listed in the fourth quarter of current fiscal,” he added.
He said: “It is too early to talk about the exact size of the issue. Generally corporates tend to dilute upto a maximum of 20% and Mahindra’s dilution is likely in the range of 10% to 15%.”
He, however, refused to get into further details. He said that the company is planning to expand its presence abroad.
After entering Bangkok, Austria, the company is now looking at entering Malaysia (in the next few months) followed by South African next year. The move has been aimed at tapping those Indians visiting these places regularly, he added.
He said the company is planning to add 20 more resorts under its ‘Club Mahindra’ product including in north and western regions in the next 12 to 18 months. Under its ‘Zest’ brand the company will add three more resorts.
“We will be spending over Rs 500 crore on our expansion and the company has acquired lands for a few resorts. We may even look at acquiring existing properties of private players. Our idea is to grow on our existing products and we have targeted to double our membership to 100,000 by March 2008.”
According to him, the time share (vacation ownership) industry is estimated at Rs 7,000 crore in India and out of which only 8% to 10% being tapped so far. Nearly 3.5 million households found to be eligible membership.
About 1.5 lakh people have rolled themselves as members of this industry, he added.