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Indian Hotels to merge Oriental Hotels in all-stock deal
The all-stock merger will increase IHCL’s southern India keys to 2,104 from 1,279, and it is expected to be accretive to earnings per share from year one.
Indian Hotels Co. (IHCL) announced an all-stock merger with its associate company, Oriental Hotels (OHL), using a swap ratio of 25:117. The deal aims to simplify the group structure and reduce listed entity complexity and governance overhead, with IHCL holding a 37% stake in OHL.
The merger is set to be completed by H2FY28 and is expected to strengthen IHCL’s presence in southern India by expanding hotel keys from 1,279 to 2,104 after the transaction. Jefferies India said the OHL merger follows prior group consolidation steps, including an exit from TajGVK and consolidation of TajSATS.
The transaction would involve about 1.6% dilution for IHCL’s existing equity base. Nomura Research noted OHL’s transaction valuation at 19x FY26 EV/Ebitda is lower than IHCL’s approximately 26x FY27 forecasted EV/Ebitda, and highlighted OHL’s FY26 operating EBITDA of ₹132 crore and 26.8% margin, with potential to expand to over 30% after the merger.
IHCL said its June quarter results showed momentum, with consolidated revenue up 15% and EBITDA up 17%, while domestic RevPAR rose 14%. Management reiterated confidence in double-digit revenue growth for FY27, supported by 650 hotels, 258 in the pipeline, and expectations that benefits from the BRICS summit in New Delhi will show up in September.