SAMHI Hotels announced a strategic investment to acquire a 70% majority stake in RARE India, an established leisure platform known for experience-led boutique properties. The total investment is ~₹470mn over 12 months, valuing RARE India at a pre-money valuation of ₹490mn. This move allows SAMHI to enter the leisure segment via an asset-light model, leveraging RARE’s ~100 hotels portfolio and a proposed exclusive affiliation with Marriott’s “Outdoor Collection by Marriott Bonvoy.”
SAMHI Announces Major Strategic Investment in Leisure Segment
SAMHI Hotels Limited has disclosed a significant strategic move to acquire a 70% majority stake in RARE India, an established platform focusing on experience-led leisure hotels. This transaction is aligned with SAMHI’s strategy of discovering under-valued assets and collaborating with global brands.
Transaction Highlights and Valuation
The cumulative investment planned by SAMHI to secure the 70% stake is ~₹470mn, to be deployed over the next 12 months. The acquisition values RARE India at a pre-money business valuation of ₹490mn. The investment will be structured in two tranches:
- Primary Investment: ~₹230mn into the company.
- Secondary Acquisition: ~₹240mn from existing shareholders.
The first tranche, securing a 55% stake, is slated for execution by May 31st, 2026.
RARE India: A Platform of Curation and Legacy
RARE India is highlighted as a platform built on a 20+ year legacy, characterized by curation, owner-led experiences, and strong relationships. Key figures defining RARE India include:
- Hotels: 67 Hotels (projected growth to 120-150).
- Rooms: 990 Rooms across 3 Countries (India, Nepal, Bhutan) in 15 States.
- Pricing Power: Average daily stay price of approximately ~₹25,000.
The platform specializes in experiential locations such as Forts & Palaces, Hill Retreats, and Nature Lodges.
Transformational Rationale and Partnership Dynamics
This transaction is deemed transformational for SAMHI for several reasons, primarily because it establishes an asset-light model for growth in the leisure segment. The core partnership involves leveraging the Marriott Bonvoy ecosystem.
How the Partnership Works:
- RARE India will become Marriott’s exclusive portfolio platform for the “Outdoor Collection by Marriott Bonvoy” in India, Nepal, Sri Lanka & Bhutan.
- Properties will be listed on Marriott.com, identified as “by RARE,” significantly amplifying their distribution reach.
The key anticipated benefits include unlocking incremental demand and providing SAMHI with future value without distracting from its core Tier-I business hotel operations.
Scalable Economics and Growth Potential
The economic model forecasts substantial growth potential following the B2C transition and network expansion:
- Revenue Potential (Medium Term): Projected at ₹900 – 1,000mn.
- Operating Margins: Expected to increase from 25-30% (Current B2B) to 35-40% (With Network Growth).
- EBITDA Potential: Expected to reach ~315-400mn with network growth.
Key Risk Factors Acknowledged
SAMHI noted potential risks, including the transition of all current properties to the Marriott platform within the intended timeframe due to potential conflicting affiliations. However, the company anticipates the portfolio scale will remain intact due to RARE’s strong reputation and the compelling nature of the Marriott affiliation for future additions. The success of the economic rationale is linked to direct sales productivity, which is partially hedged by the low entry price securing downside risk.
Source: BSE
