This Tata-Backed Mid-Cap Stock Is Down Despite Expanding Its Brand Portfolio

Tata Group-supported Indian Hotels Company (IHCL) witnessed a slump in its stock value on Friday despite the expansion of its brand portfolio. This expansion came through a ‘strategic alliance’ with Kolkata’s Ambuja Neotia Group, which recently acquired Tree of Life Resorts & Hotels.

What Happened? In November of the previous year, the Kolkata-based Ambuja Neotia Group announced the acquisition of the Gurgaon-based boutique hotel chain, Tree of Life Resorts & Hotels, for an undisclosed sum. This group, already managing over 750 hotel keys under IHCL, plans to add another 200 keys.

Harshavardhan Neotia, chairman of the Ambuja Neotia Group, noted the acquisition’s rationale. The post-COVID-19 trend towards boutique experiential luxury hotels influenced their decision. “We noticed a growing demand for boutique accommodations offering luxury, privacy, and unique experiences,” he stated. This consumer preference shift, alongside the opportunity presented by the previous owner’s divestment, led to the partnership with IHCL.

Neotia revealed ambitious plans to add “stunning and bespoke” destinations like Jawai, Ranthambore, and Ayodhya to the Tree of Life portfolio. He aims for a portfolio of 100 properties within five to six years, leveraging IHCL’s support to significantly expand its footprint.

Chhatwal is confident in achieving a target of 25 hotels by the end of 2026 and mentioned a future fee structure involving payments to Taj. Neotia added that the company would be board-managed in the future with distinct roles for each party.

IHCL, outpacing its market guidance, now boasts a portfolio of over 300 hotels with 90 under development.

Price Action: Indian Hotels Company Limited shares were trading 0.21% at ₹526.50 on Friday.