New Delhi, Jan. 16 -- Indian Hotels Co Ltd (IHCL), the hospitality arm of the Tata Group, has struck a deal to acquire a controlling 51% stake in Brij Hospitality Pvt Ltd, which manages 22 properties, for up to Rs 225 crore ($24.8 million).

The deal involves IHCL, the operator of Taj hotels, making a primary investment of between Rs 105 crore and Rs 140 crore and a secondary share purchase of Rs 85 crore, the company said in a stock-exchange filing. IHCL will also receive marketing and distribution fees from Brij portfolio hotels.

Of Brij Hospitality's 22 hotels, 11 are operational, which had a cumulative turnover of Rs 62.31 crore in FY25. This is likely to rise to Rs 70 crore during the current financial year and to Rs 90-100 crore by the end of FY27.

IHCL will acquire the majority stake in Brij Hospitality either on its own or along with its step-down subsidiaries ANK Hotels Pvt Ltd and Pride Hospitality Pvt Ltd. It already owns a 51% stake in these subsidiaries.

This is the third acquisition by Indian Hotels in the last six months. Earlier, it bought a 51% stake in ANK Hotels and Pride Hospitality, the operator of Clarks hotels, for Rs 190.5 crore. It also acquired a 51% stake in Sparsh Infratech Pvt Ltd, which owns and operates the 'Atmantan' health and wellness resort at Mulshi in Maharashtra, for Rs 240 crore late last year.

IHCL has in its portfolio several top hotel brands including Taj, Vivanta, Gateway, SeleQtions and Ginger.

Brij Hospitality, owns an eponymous brand 'Brij,' a boutique experiential leisure offering. These properties are located across cities such as Varanasi, Dalhousie, and Jaipur, among others.

IHCL will gain ownership of the Brij brand through this acquisition and, in collaboration with Brij's founder, aims to develop the boutique leisure segment in India, the company said in its filing.

At least one brokerage, Nomura, has given the deal a thumbs up. Nomura said the deal highlights IHCL's ability to continue growing inorganically. Nomura estimates IHCL could generate a cash surplus of Rs 1,000 crore annually, after dividend and lease payments, which can be used for further buys.

Published by HT Digital Content Services with permission from VC Circle.