SAMHI Hotels has announced a strategic investment to acquire a 70% majority stake in RARE India, an established leisure platform. The deal values RARE India’s pre-money business at ₹490mn, with SAMHI investing a cumulative ~₹470mn over 12 months. Post-acquisition, RARE India will become the exclusive portfolio platform for Marriott’s “Outdoor Collection by Marriott Bonvoy” across India, Nepal, Sri Lanka, and Bhutan, establishing SAMHI in the leisure segment via an asset-light model.
Strategic Investment in Experiential Leisure
SAMHI Hotels Limited has disclosed a significant transaction involving the acquisition of a 70% majority stake in RARE India, a platform featuring more than 60 experience-led hotels totaling 990 rooms across India, Bhutan, and Nepal.
This move aligns with SAMHI’s strategy of entering the leisure segment using an asset-light model. The company views this as a transformational step, highlighting 5 compelling reasons for the transaction:
- Growth of experience-led leisure.
- The 20+ year legacy and respected team of RARE India.
- Existing scale and immense growth opportunities.
- Low entry price and asset-light model.
- Affiliation with Marriott to support distribution.
Transaction Value and Structure
SAMHI will invest a total of approximately ~₹470mn to secure the 70% stake. This investment comprises:
- A primary investment of ~₹230mn into RARE India.
- A secondary acquisition of ~₹240mn from existing shareholders.
The transaction will occur in two tranches. The first tranche, acquiring a 55% stake, is set for execution by May 31, 2026, with the second tranche to follow within 12 months of the first.
The Marriott Partnership Impact
A core component of the deal is the proposed affiliation with Marriott. Following SAMHI’s investment, RARE will be appointed as Marriott’s exclusive portfolio platform for the “Outdoor Collection by Marriott Bonvoy” in India, Nepal, Sri Lanka, and Bhutan.
This partnership is expected to:
- Amplify RARE’s reach by listing properties on Marriott.com and the Bonvoy platform.
- Enhance RARE India’s direct-to-customer interface, marketing, and booking capabilities.
- Improve RARE India’s ability to generate income and become a preferred partner for new owners.
Scalability and Economic Potential
The presentation outlines a clear path for scaling operations and economics through a transition from a B2B model to a B2C model supported by network growth. Key projections include:
| Metric | Current B2B | With B2C | With Network Growth |
|---|---|---|---|
| No. of properties | 60+ | 60+ | 120-150 |
| Revenue potential (₹mn) | 25-30 (Subscription) | 900-1,000 | 900-1,000 |
| Operating margins (%) | N/A | 25-30% | 35-40% |
| EBITDA potential (₹mn) | ~150 | ~150 | ~315-400 |
The platform currently supports 67 Hotels with 990 Rooms, spanning 15 States across 3 Countries, featuring an average daily stay price of approximately ₹25,000.
Key Risk Factors Acknowledged
SAMHI noted several risks, including the possibility that not all existing RARE India properties may transition immediately to the Marriott platform due to conflicting affiliations. Additionally, RARE’s careful, quality-over-volume selection process could potentially slow the pace of portfolio growth, although this is also seen as key to long-term value creation. The economic rationale relies on direct sales productivity, which is partially hedged by the distribution power of Marriott.
Source: BSE
