loader2
Login Open ICICI 3-in-1 Account

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

Indian Hotels Company transits from its JV in Taj GVK to management contract

ICICIdirect Research 26 Dec 2025 DISCLAIMER

Indian Hotels Company (IHCL) transited from its joint venture (JV) with the GVK-Bhupal family in Taj GVK Hotels and Resorts (TAJ GVK) to a long-term management agreement for its portfolio of hotels by selling its entire stake of 25.52% in Taj GVK to GVK-Bhupal family.
Post the transaction, GVK-Bhupal family will continue to be promoters and will hold 74.99% in the company,
Taj GVK has a portfolio of seven hotels with 1,500 rooms, while new property of 256 rooms in Bangaluru is set to open in 2026. All these rooms will be managed by IHCL under the long-term management agreement.
Stake sale will happen at price of Rs370 per share (2% discount to last trading price). Overall deal value be around Rs 592crore. There will be one-time exceptional gain of ~Rs552crore due to stake sale (considering the IHCL’s investment value of Rs40cr in Taj GVK).  
This transition is unlikely to have any material impact on the earnings of IHCL in the coming years. Since TajGVK is accounted as a Joint Venture (JV) in IHCL’s Consolidated Financials, its contribution to the earnings is in the form of share of profit from associates, which was Rs29cr in FY25 (~1% of the earnings).
If we consider a management contract agreement with fees of ~5% of revenues, IHCL will earn management fees of Rs23-25cr, which will directly get flow at the EBIDTA level.
On the business front, Management has clarified that Indigo’s flight cancellation issue will not have any significant impact on the business performance of the company in Q3. Strong wedding and holiday season will drive higher occupancies and rooms rentals in key holiday/leisure destinations in the Q3.
The stock has witnessed healthy time correction in the past one year. In view of the favourable demand-supply ratio over the next three years, we maintain our Buy recommendation on the stock with a price target of Rs915.

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere