In a major development for the Indian hospitality sector, Samhi Hotels Ltd. has announced a joint venture with Singapore’s sovereign wealth fund, GIC, to establish an investment platform focused on upscale and higher-category hotel assets in India. The partnership marks a significant financial and strategic milestone for Samhi, as it leverages GIC’s financial strength and global reputation to unlock value and expand operations.

Deal Structure and Strategic Implications

Under the terms of the agreement announced on April 24, GIC will acquire a 35% stake in three of Samhi’s subsidiaries:

• Courtyard & Fairfield by Marriott, Bengaluru Outer Ring Road (ORR)

• Hyatt Regency Pune

• Trinity Hotel, Whitefield Bengaluru (recently acquired)

The investment is pegged at ₹752 crore, valuing the three subsidiaries at a combined enterprise value of ₹2,200 crore.

Debt Reduction and Capital Utilisation

Of the total investment, ₹603 crore will be used immediately to reduce debt across Samhi’s portfolio, with a small portion earmarked for transaction expenses. The remaining ₹149 crore will be deployed over the next two years for capital expenditure related to the Westin / Tribute dual-branded hotel in Bengaluru’s Whitefield.

This capital infusion serves a dual purpose:

1. Primary investment: Repayment of existing debt and support for capex.

2. Secondary investment: Acquisition of Samhi JV hotel shares from Samhi to further deleverage the balance sheet of other Samhi entities.

Significant Debt Reduction and Improved Financial Metrics

Upon closure of the transaction, Samhi expects to reduce its debt by ₹580 crore. This will result in an immediate improvement in key financial metrics, including:

• Net debt-to-EBITDA ratio below 3.5x at closing

• Targeting sub-3x leverage within 12 months

These reductions come without compromising on growth, demonstrating the financial prudence of Samhi’s capital recycling strategy.

Positive Impact on Profitability and Future Cashflows

The transaction is expected to have a positive impact of 15% to 20% on Samhi’s profit after tax (PAT), driven by lower interest expenses and improved operational performance. Furthermore, the capital expenditure support from GIC for the Bengaluru Whitefield project will boost future cash flows.

Strategic Partnership with GIC Enhances Samhi's Market Position

GIC's involvement is seen as a major vote of confidence in Samhi’s growth strategy and execution capabilities. By bringing in a global investor of GIC's stature, Samhi aims to:

• Scale its premium hotel portfolio

• Strengthen its balance sheet

• Position itself as a market leader in India’s mid-to-upscale hotel segment

The JV aligns with Samhi’s capital recycling strategy, wherein capital is freed up from operational assets and redeployed into growth-focused initiatives.

Recent Stock Performance and Market Response

Despite the announcement, shares of Samhi Hotels declined 1.33% on Wednesday, closing at ₹173.86 apiece. However, the stock has gained 14.7% in the past month, reflecting investor optimism around its long-term growth potential and debt reduction roadmap.

Conclusion: A Strategic Leap Towards Financial and Operational Resilience

Samhi’s partnership with GIC underscores the company's commitment to long-term value creation, debt management, and operational growth. With a healthy pipeline of premium hotel projects and a leaner balance sheet, Samhi is now better positioned to navigate macroeconomic challenges and capitalize on India’s burgeoning hospitality sector.

As the company continues to strengthen its asset base, forge global partnerships, and maintain financial discipline, it is poised for sustainable growth in the coming quarters. The JV with GIC not only reduces current liabilities but also enables Samhi to reinvest in future-ready hotel infrastructure — ensuring long-term competitiveness and shareholder value.

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