IntelliStay that operates full-service hotels Mango Hotels, i-Stay Hotels and Apodis Collection last raised an equity round in tranches from Apodis Hotels and Resorts (Apodis) which now hold a significant majority stake in IntelliStay Hotels.
PRAMA is the promoting company of Apodis. Since 2012, IntelliStay Hotels has signed and opened 23 hotels till March 2019. Another 30 hotels are in the signed and project stage with a target of over 2500 keys operational by March 2020. This puts IntelliStay on the list of top 10 hotel companies in India by number of keys under management.
PRAMA recently completed a strategic round of investment from TripBorn, an emerging Indian last mile Commerce and Connectivity platform. As part of the deal, PRAMA will use the infusion to drive the businesses of IntelliStay and the other group company, Apodis Foods & Brands, which provides Food & Beverage services to several popular economy hotel chains across India.
The transaction is expected to add immediate scale to the businesses within India's growing hospitality segment. PRAMA generated approximately USD 8.5 million in revenues from its operating entities for the year ended March 31, 2019 and generated positive cash flow from operations.
"This is a transformational opportunity for our company," commented Deepak Sharma, Chief Executive Officer of TripBorn. "The addition of the PRAMA team and their rapidly scaling hotel platform is a very unique opportunity to serve India's growing market, where over 650 million young population aged between 24 and 35 driving demand for affordable, quality, branded hotel experiences. PRAMA is extremely well positioned as one of the first operators in India to recognize the power and value of an asset-light business model by developing affordable hotel brands that deliver consistent hotel guest experience and quality service at attractive prices."
"We chose to partner with TripBorn, as we were drawn to their robust long-term India and global strategy, which could help further establish our brand and accelerate our growth. The partnership with TripBorn will help support our reach in over 200 markets within India. We look forward to benefiting from greater access to the U.S. capital markets, in order to speed up our organic growth, as well as our M&A strategy, through accretive acquisitions and value-added partnerships," Mahesh Gandhi, a Promoter of PRAMA, said.
Prashanth Rao Aroor, Founder, Managing Director and CEO of IntelliStay Hotels, said, "Part one of our journey from start up to critical mass has happened over the last 6 years. Our ability to move from initial fixed leases of hotels to management contracts and then to hybrid revenue share contracts has given us a large top line for our size of inventory."
Speaking of the journey ahead, Aroor added, "As we have begun to accrue and grow from profits, PRAMA capitalizing IntelliStay at this time helps us ramp up faster. Of particular interest will be an effort to take the i-Stay Hotels brand, which is in prototype at 5 locations, to prime railway stations, bus transport hubs and the Indian highways, with emphasis on quality food & beverage, backed by service level assurances. Our food and beverage business is over 35% of our revenues, and we will focus on wedding and leisure destinations with the Apodis Collection brand. The Mango Hotels and Mango Hotels SELECT brands are on their way to scale up as highly curated mid-scale boutique hotel brands that localize to each destination,” Aroor said and added that with Mango Suites and Mango Suites SELECT, the chain has a very versatile long stay product for mixed use developments.
“We are now significant in Karnataka, Goa, Maharashtra, Gujarat and Rajasthan. Inroads have been made into Punjab, Jammu & Kashmir, Delhi NCR, Himachal Pradesh, Uttarakhand, Uttar Pradesh, Orissa, Chhattisgarh, Madhya Pradesh, Andhra Pradesh and Tamil Nadu, where our first few hotels are opening this financial year. We will continue to grow cluster wise to ensure manageable operating costs and effective supervision with empowered regional teams. We will look to grow inorganically by collaborating with asset light hospitality businesses that bring scale, new skills, diversity of consumer segments and specializations like adventure, camping, backpacking, alternative housing and banquets. We have the management platforms, credibility and now the technology," Aroor informed.