Ladies and gentlemen, good day and welcome to the business conference call of SAMHI Hotels Limited. This conference call is being hosted to discuss the strategic partnership of the company and GIC for a scale-plus hotel investment platform in India, and the company will refrain from discussing anything on business performance or financials for Q4 FY 2025. This conference call will contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the conference over to Mr. Ashish Jakhanwala, MD and CEO of SAMHI Hotels Limited. Thank you, and over to you, sir. Thank you. Good morning, everyone. First of all, thanks for taking our time at such short notice. We are obviously very excited about getting you through the transaction that we've just announced this morning. I'll give you a quick summary of the transaction, and then we will leave the floor open for Q&A. We have uploaded a business update presentation on the stock exchange filings, and I hope you've had a chance to look at it. Otherwise, we can obviously cover it in the Q&A. In summary, SAMHI Hotels has entered into a partnership with GIC, which is a leading global institutional investor, to establish an investment platform for upscale and higher category of hotels in India. Tracking GIC demonstrates our ability to attract high-quality institutional investors through our life cycle. It started with investment from Sam Zell and GTI, followed by an investment from International Finance Corporation, Goldman Sachs, Aptia, and now a partnership with GIC. The transaction involves, and to clarify, is limited as of now to three of the company's subsidiaries that own the Courtyard and Fairfield on Marriott's Bengaluru Outer Ring Road, the Hyatt Place Pune, and recently acquired Trinity Hotel in Bengaluru Whitefield. GIC is to acquire 35% in these three subsidiaries, which is the total investment of INR 752 crore, which will be split in two parts. About INR 303 crore upfront will be used to reduce the debt across our portfolio and a small amount towards expenses, and INR 149 crore over the next two years to part fund the expenditure for the proposed Westin and future portfolio Bengaluru Whitefield dual-branded hotel. The transaction follows our strict strategy of capital recycling and will lead to significant reduction in debt and a partnership with global investors of GIC's stature for funding future growth. On closing, we expect INR 580 crore of reduction in debt and 15%-20% upward impact on the account of this transaction. The total investment of INR 752 crore across three subsidiaries is based on the total value of those three subsidiaries being about INR 2,200 crore. It includes primary investment of debt repayment capital expenditure across all three subsidiaries, and secondary to acquire shares in SAMHI JV from SAMHI, and these funds will obviously further reduce debt across SAMHI entities. With this transaction, our net debt to EBITDA at closing is expected to be less than 3.5x, which is ahead of what we had anticipated in terms of our leverage level. More important, it accelerates our path to take the leverage down to less than 3.0x in the next 12 months and without compromising on growth. The reduction in debt gives a significant boost to our future cash flows and also the fact that part funding of the Westin and Tribute portfolio Bengaluru Whitefield will be done by GIC. The transaction structure and impact on financials has been provided for in the business update presentation. In summary, despite the short-term impact of significant deleveraging of our balance sheet, the real value of this partnership reflects in what it means for future growth. As you know, upscale hotels are capital-intensive, but now with a strong partner and a much healthier balance sheet, we have the ability to grow this platform beyond the three seed assets. This augments our existing plan to double our inventory of upscale hotels, which will have significant impact on our revenues and profitability. Ladies and gentlemen, this is a summary of the transaction. I would now leave the floor open for Q&A. Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask questions may press star and 1 on their telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Murtaza from Hotel Securities. Please go ahead Yeah. Hi, Ashish. Congratulations on closing this transaction. I'm very sure there are no major concerns that are missing. Would you be able to share some kind of trailing data that we have to have and if you could talk over number of that as well in terms of what the market is, what should we be looking at on these assets both with the incremental utilities that is useful as compared to the INR 2,200 crore valuation? Yeah, Murtaza, thank you. The trailing 12-month data from these three hotels as of December 2024 was INR 133.8 crore, INR 133.8 crore. Okay. That reflects a value of about INR 2,200 crore against a value of INR 133.8 crore. The debt number that you're reducing at the SPVs, does this make all of these SPVs completely debt-free, or what's the position of debt at the asset levels, both 3 and 4, 6, and 7? Murtaza, of the three entities, SAMHI JV will become debt-free. Inmar is already debt-free and will remain debt-free. Ascent Hotels will continue to have a debt of about INR 200 crore. The balance debt reduction is actually happening across other SAMHI entities because this transaction does allow us streaming of certain capital from the subsidiaries to the parent company, and the parent company is then further using that capital for reduction of debt across other subsidiaries and of assets in the parent itself. The money which comes to the parent from the subsidiaries then allows you to reduce the debt? Yeah, that's right. All right. Thank you so much. I'll come back next week to have Ashish. The next question is from the line of Dinesh Joshi from KL Gasoline. Please go ahead. Yeah. Thank you for the opportunity. My question is on debt reduction, which we gave out INR 600 crores from this fundraiser. The interest cost will also come down. How to think about the minority interest given the fact that we are now viewing about 50% in the JB? You mentioned that the three assets had about INR 134 crores of JB in EBITDA, but the JB you have mentioned that at $3 million to 15%-20% post reduction in interest. Does it take into account the minority interest factor? How to think about that going ahead given a few of these assets, especially the one in Bengaluru, that's massive in Bengaluru, are yet to be in operation? Especially the second one. This one is very understanding is to be made. What are your thoughts on that? Dinesh, absolutely. When we talk about the impact on that, we have considered both the reduction of interest but also an inclusion of a minority interest that we will create because of the partnership. Our estimates of 15%-20% upside in reported plan considered the impact of the minority interest as well. That has been considered when we give the impact on that. I think the savings in interest cost on two accounts. The immediate saving will obviously be on account of straight interest reduction because of the lower debt. We also believe that the strong partner in GIC and the fact that our balance sheet now is very strong, we expect the interest rates also to come down from the current level. Last time, we had reported about 9.4%. We expect those interest rates to fall over the next six months. The combined impact of both these two will also have significant impact on interest reduction. The minority interest, as far as currently our estimates are, we have factored that in to give the guidance of 15%-20% upside on the assets. My second question is to your answer to the earlier question where you mentioned that Ashish will still have some debt to be closed, while the money that comes into the STV will be used to take care of debt at the parent level. Is the funds at least at the STV level? Why are we not knocking off the entire closing period of the STV level? Because that money is shot by GIC. Why are we reducing the STV level? Two things. First of all, the transaction, the way it is structured, needs to give GIC a 35% stake. If you look at SAMHI JV, which is one of the subsidiaries, there the transaction involves both primary investment in the company, and that money is going to 100% retire the debt in that company. It also includes a secondary transaction where GIC is buying a small percentage shares in that STV from SAMHI to get to 35%. Obviously, that money comes into SAMHI's books of accounts, which we then use to retire debt in other companies. In Ascent Hotels, SAMHI has infused a significant amount of shareholder debt over the last several years to support their business. GIC, when it invests primary capital in that company, that capital is being used to effectively repay the SAMHI shareholder loan. You would appreciate that any strategic investor of GIC stature would not want an equity partner to also be a debt provider in an entity. Ascent Hotels is returning debt provided by SAMHI to SAMHI. That money also will be used by SAMHI to pay the debt both at the parent level and also across some of the other subsidiaries. In Inmar, there is no debt, and the future capital expenditure that we're anticipating, part of that, to the extent of about INR 150 crore, will be brought by GIC. Our capital commitment to that project also reduces materially because of this investment. If you look at all of these three entities, the transaction has been structured to provide GIC with a 35% stake, number one. Number two, it has been done to make sure that it is tax-neutral, which means we have no capital gains tax across the entities. Three, if you look at the trailing EBITDA of about INR 133 crore and an outstanding debt of INR 200 crore in these entities, the net EBITDA in this portfolio is extremely, extremely healthy. We have just decided to allocate capital in a way that the leverage is balanced both in entities which are now adjoined to GIC, but also entities which continue to be 100% owned by SAMHI. Understood. Understood. One last question from my side. I think the commitment from GIC is approximately INR 2,500 crore, and they are putting in about INR 70 crore to this place. Now, given the fact that the commitment is quite higher, do they have any kind of utility to shift in utilities to any future M&A that we do, or will those transactions be independent of that? Given that the commitment is quite massive in nature, is there any extra plan or line of thought on how to think about that? First clarification, the $300 million stated commitment is by the platform and not by GIC alone. It does include the seed assets. That's just a clarification. The numbers are different to Dinesh, what you've just mentioned. Yes, it still gives us a firepower for growth. If you see, if you just do the simple math, $300 million, 35% stake coming from them, 65% from us, and of that 65%, majority of that buyout has been contributed through current seed assets. There is firepower that we can draw from our partner for future growth. Now, that's part one and clarification. Second, in terms of exclusivity, as we mentioned, the intent of the partnership is to start with the seed asset and, of course, grow this platform in the upper scale stage, GIC. This platform, let me say, this platform actually has where we own 65%, GIC has 35%. This platform has the first right on upscale hotels that we find as an acquisition opportunity. However, if this platform is not desirous or cannot execute on those opportunities, then SAMHI obviously has the flexibility to continue with those opportunities. That is part one on upscale. On the mid-scale portfolio, there is no exclusivity or there is no such provision. Having said that, as we all know, GIC is a formidable partner, brings tremendous stature and appeal to the business. We would obviously be keen to see and explore opportunities to expand this partnership in the future. There is no such contractual obligation or promises on either side. The last bit on exit, GIC is known to be a high-quality, long-only institutional provider of capital. We just started the partnership with Dinesh. Our lesson, and we have built this business with institutional capital over the last 14 years, and our only lesson is one should focus on building a good business. If you do build a good business, eventually, the monetization opportunities for investors come by themselves. Now, unlike SAMHI, which started with a lot of capital deprivation in a different decade, this partnership is starting with no capital deprivation, very healthy balance sheet, a very strong market cycle. We actually believe all of that, plus the growth that we can provide jointly to this platform, will create a pretty attractive equity story which will find its own ways of monetization and value creation. I think both the partners know that there may be an opportunity or requirement of monetization in the long term, but in the near future, that's not really the point of discussion or deliberation at our end. Sure. Thanks for that. Congratulations on this transaction and bringing to the conclusion. Congratulations. Thank you so much. Thank you. We'll take the next question from the line of Prashant Biyani from Elara Securities. Please go ahead. Yeah, thank you for the opportunity and congratulations on the transaction, sir. On this platform, is there any first right for the platform on greenfield assets if we want to build it in any of the segments? As I mentioned earlier, this platform has the right of first offer on all upscale or higher category of hotels, whether they're greenfield or brownfield or acquisition. Irrespective of the development type, so long as it's an upscale hotel, this platform has the first right. Any broader informal discussion with regard to how many keys would the platform want to have in the next six, seven years? No. I think as a company, and to that extent, we are very aligned with our partner in GIC. We really do not believe in crystallizing or vanity numbers. We believe that this platform will throw a serious amount of free cash every year. In addition to that, both the partners have now the ability to bring regional capital. We have capitalized the company extremely well for growth. That is point one. Point two is our last decade of credibility and experience of capitalization and turnaround. We do believe that skill sets we have acquired over the last decade, combined with the strong liquidity that we provided to this platform and a partner like GIC, would make us a fairly competitive platform for future growth. I am sorry that I'll not be able to give you any definitive guidance on hotels or rooms, but we do believe that this is capital and partner. There is a fair bit of excitement coming our way on this platform. Because we have kind of resolved all concerns around balance sheet, it also encourages the broader platform that is SAMHI to continue to seek growth opportunities. For new asset additions, we will continue to have focus on inorganic growth rather than now having more focus on greenfield. Would that be correct assumption? Absolutely. Absolutely. I think we've always stated that we believe that in the segment that we operate in, which is urban business hotels, less value is created. This is a risk-reward mechanism. I can't say there's value. There is risk-reward equilibrium in acquisition and turnaround. That's our skill set. That would be the focus for this platform as well. Lakhisa, in SAMHI JV, how much percentage is GIC buying from us and at what value? In SAMHI JV, they're buying 14% from SAMHI. The balance gap between 14% and 35% is through infusion of funds into the company. That's how they're getting to 35%. 14% is at what price? Okay. SAMHI JV, INR 115 crore is the price paid for 14% stake. Okay. That is from my side. Thanks. Thank you. We'll take the next question from the line of Pradyumba Choudhary from JM Financial Family Office. Please go ahead. Hi Ashish. Congratulations on this transaction. I had a couple of questions. The first one being, you spoke about the debt status of the three entities post-transaction. When you speak of SAMHI JV and Inmar becoming debt-free and Ashish having INR 200 crores of debt, are you including any shareholder loans or will we completely get rid of all the shareholder loans in these two entities? There will be no shareholder loans in these entities for the month. Understood. Second was, what was the thought process to get GICs in these entities rather than at the listed entity level via mastering? Because I believe the EV to EBITDA at which this transaction is happening seems to be at around 17x-17.5x trading EV to EBITDA, which seems to be only a slight premium to what the listed entity's valuation is, right? This is coming at the cost of the exclusivity which we're losing. Exclusivity, but we are giving up 35% stake in this upper-scale hotels and above strategy. What was the thought process for you guys and also from GIC's side? Pradyuman, first of all, I think we have clearly stated that we believe that recycling of capital is an important pivot for creating shareholder value. I do not see this as loss of 35% or valuation of 35%. The way we see this is that we had invested certain capital in these assets. We have worked hard on these assets over the course of several years. We have created a certain value, which is a reasonable upside from what we had invested. When we monetize 35%, we are taking some of our invested capital back from these assets, and that capital will be redeployed in creating new assets. I think it is about making sure that we keep the company flushed with capital for growth, and part of it is coming from capital which is stuck in our existing assets, right? From our perspective, capital recycling for a company like ours is a fundamental pivot to creating long-term shareholder value over and above what the sector gives you. Because what the sector gives you is pretty much range-bound for all players and for all players. That's one. I think we're very excited that we've been able to do it, A, in a meaningful way, B, with a partner with tremendous reputation and capabilities to support the growth of the business in the future. In terms of this right of first offer, I think, as I mentioned in my introduction call, the reason why so far we have limited it to upscale hotels is also because of the profile of upscale hotels. These hotels tend to be fairly capital-intensive. As we grow this upscale platform, having a formidable partner of GIC's structure really helps us balance risk and reward. One of the things, and my apologies, we did not mention in our summary, as a part of the transaction, SAMHI is also entitled to an asset management fee of 4% of the EBITDA. In addition, we can charge some development fee in assets where there is some undergoing certain development. On one side, while we are letting go of part of our profits, we are recouping a lot of capital. That capital clearly is intended to be deployed for growth and therefore will bring price returns for us. In addition to that, purely from a cash-on-cash return perspective, we also have this incremental 4% asset management fee, which is applicable to the current pool of assets and will also be applicable to the future assets that we add to the portfolio. I think we believe this is a great way to recycle our capital, continue to provide growth to SAMHI, not stress the balance sheet. Now, coming to your question about why in subsidiary, why not in the parent, I think the answer is very simple. We found a great quality partner who brings regulation, governance, processes, and their contribution in the private space can be far more active than it can ever be in the public space. Because we're a professionally managed company, we actually believe that that sort of an influence is a value creator for us. We like to benefit from their active participation in these joint ventures rather than just having another institutional investor in that table. We all respect them, and I think we learn a lot from them. An active participation from an investor like GIC, I believe, will create a lot more value than an Excel sheet can demonstrate in the short term. That was very clear. Thank you. Just one follow-up on asset management fees, you spoke about 4%. This would directly throw down your EBITDA, right? Through SAMHI's listed entity. Great. Great. Thank you. Thank you. The next question is from the line of Karan Khanna from Ambit Capital. Please go ahead. Hi. Thanks for the opportunity. Hi, Ashish. Same couple of questions from my side. And congrats on this transaction. First, Ashish, because of this transaction, given that your net debt to EBITDA comes down to about 3x, the absolute leverage of the equity comes down to 30. How are you thinking about future free cash flows that the business will generate? Will you look to now potentially become more aggressive in terms of asset development, or will the focus be towards enhancing the balance sheet or reducing the further leverage on balance sheet, question number one? Second, what does this transaction do to your credit rating eventually, and do you see the finance cost coming down further in the future? Karan, first of all, being a public company teaches you a lot because you hear a collective discernment and opinion from not one, but hundreds of investors. We heard it loud and clear about leverage. Even though we believe that we have invested capital in high-return assets over the last year, year and a half, as they mature and stabilize, they will resolve our net debt to EBITDA in the company. Over quarters, we respected an opinion coming our way which said this business is volatile. Every quarter, there is a news come in which makes people worried. Therefore, high leverage is not something that investors feel comfortable with. I will remind ourselves that we had promised that we will go to 3.5x by end of 2025. We had given an eventual target of 2.5x being a healthy net debt to EBITDA. Prior to this transaction, before the Bengaluru acquisition, we had actually kind of gone to about 4.4x net debt to EBITDA, including the money spent on acquisition. Obviously, the 3.5 target was being delayed by a year and 2.5 even further. With this transaction, we are very, very happy. As we close this transaction, we are fairly confident, almost certain, that the net debt to EBITDA on closing will be less than 3.5x. Within the next 12 months, because of what we are seeing in terms of EBITDA growth, we are very, very certain to bring that down less than 3x. Immediately after that, we feel the path to get to that 2.5 and less than 2.5 net debt to EBITDA is fairly easy and almost, I may say, automated, right? Now, when we look at the next three years, four years of how we see the business growing, which is our existing pool of assets, the new Holiday Inn Expresses coming alive across the three markets, the W in Hyderabad, which is under development, Tribute, and the Westin in Bengaluru. When we combine all of that together, Karan, if you take a range of between around 15%-20% at a shaker, which we believe is fairly conservative given the growth pipeline, this company, SAMHI as a portfolio, will accumulate about INR 1,000-odd crore, INR 1,000 crore- INR 1,200 crore of cash, of which we already have identified use for about INR 500 crore, which is on the CapEx that we announced earlier. Therefore, we are now seeing and having clear visibility on an investable surplus of about INR 500 crore on our own account. We're not talking about what our partners can contribute in the upscale space. That's one thing that I think we've taken the company to a position where we can focus on growth without compromising on our path to be leveraged to 2.5x and lower than that, point number one. Having said that, I wouldn't subscribe to saying that we will be aggressive on acquisitions because that's not a factor of capital availability. That's a factor of discipline you've learned in life, right? We believe aggression in acquisitions never works well in the long term. We will continue to be very disciplined. We will continue to be very range-bound. We have certain do's and don'ts. We like to continue to follow them. Having said that, I think the team has built a very healthy pipeline of assets. That's how we see the growth come through. The other good news, Karan, and we've spoken about that in the earlier call, is we continue to see opportunities on long-term variable leases. As we combine a healthy balance sheet, a lot of free cash coming our way, plus the contribution from our partner subject to their rating deals, and our ability to also combine a greater share of long-term variable leases, we feel fairly excited that we've opened SAMHI's path to growth. Again, I will remind ourselves, aggressive is not a word that we subscribe to. We like to maintain a fairly disciplined approach to growth because I think that's the way for long-term financial success. Second question, credit rating. Absolutely, yes. I think our net debt to EBITDA, the credibility that a partner like GIC brings to a portfolio, we definitely expect our lending partners to acknowledge that and reflect that in the pricing of the debt. We were at 9.4% as of December 2024. We're fairly certain we'll be circa 9.2% in the next few weeks. Our target is to now push it lower than 9%, given where our balance sheet will be upon closing. Just one follow-up question, Ashish. You spoke about long-term variable leases. Does this platform also allow you to potentially add assets under long-term variable leases, or will the assets have to become entirely owned by the platform? No. The upscale platform with GIC is agnostic, except for the fact it needs to be an upscale hotel with 100 rooms and above. It can be a leasehold. It can be a freehold. In the larger portfolio, which is a broader mid-scale, which is also where we're seeing a phenomenal amount of growth, we continue to see a very strong pipeline of leasehold assets. Sure. That's helpful, Ashish. Thank you and all the best. Thank you. Thank you very much. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two participants. Should you have a follow-up question, please rejoin the queue. We'll take the next question from the line of Anil Shah from Insightful Investment Managers. Please go ahead. Yeah. Hi. Congratulations on the deal. Just two questions. This asset management fee of 4%, could you just clarify? Is this exactly on revenue? Is it on EBITDA? Is it on assets? Hello? Hi. The 4% fee is 4% of the EBITDA generated by the hotels owned by the platform. Okay. 4% of the EBITDA. And it includes existing assets as well, which is the EBITDA. Yes. Yes. Yes. Perfect. Perfect. Just to be clarified, Ashish, in one of the JV-registered assets, we are also transferring INR 200 crore of debt to the new platform. Is that correct? No, no. The existing debt will continue. In that sense, there are two sorts of debts, right? There is a debt from ICICI Bank, which is a third-party debt. That will continue as is. In addition to that, SAMHI Hotels, as a parent entity, had provided certain loans to the subsidiary. Those loans will be repaid to SAMHI Hotels. Right. The ICICI Bank debt would be about INR 200 crore, isn't it? That's right. That will now basically go into this new JV, wherein we have 65%, and 35% will be obviously with GIC. Absolutely. You're right. As far as the parent is concerned, that debt will now move to a JV. We have 65% of the debt. It will always end at the subsidiary. The debt will always end at the subsidiary. Yeah. It remains in the subsidiary. Correct. Thank you. That was the question. Thank you so much. Participants, please limit your questions to a couple of participants. The next question is from the line of Sarvesh Gupta from Maximal Capital Private Limited. Please go ahead. Good morning, sir. Thank you all for giving me the opportunity to participate in the deal. Just a couple of clarifications. This platform used to be $300 million commitment. GIC share is $100 million. I think INR 750 crore you have already explained in the presentation. Is there anything apart from this INR 750 crore because that will leave only around INR 100 crore on the table from GIC? Yeah. First of all, it's an indicative target, Sarvesh. You are absolutely right. The math says that there's about $105 million of GIC shares, of which about $85 million or so are coming upfront. There's balance $20 million as a commitment, faces a $300 million number. This is a very indicative number. The intent of both the partners is to grow this platform as the opportunities present themselves. We'd like to believe that post this transaction and strengthening of our balance sheet, both SAMHI and, of course, GIC's ability to put capital is unquestionable. Both partners will be well-capitalized to continue to exercise good quality growth opportunities. $300 million, the math will come out to about $20 million of uncommitted capital from GIC, which, if you see, being 35% of future yields, gives about $50 million of total capital for an acquisition. Just within 20%, that assay you said is after including the minority interest. Does it include the interest cost reduction possibility also, or is it just the reduction-related interest cost? It's only currently a mathematical calculation on current interest rates and reduction in the cost rate. It does not factor in any reduction in the interest rate per se. I think that will be sharpening the pencil a bit too fine. You're absolutely right, and I'll repeat. We have factored in the minority interest as an expense, and we have estimated a 15%-20% upside on the reported PAT. Just for clarification, that reported PAT is without any exceptional items and non-cash ETAs. As Rajat has mentioned earlier, we have accumulated losses in our balance sheet across subsidiaries. We do expect that in future years, some of them may be recognized as income. Ignoring that, we're talking about pure PAT coming from operating business without any. Understood. On a follow-up to a previous participant's question, which was why not make it a legend indeed listed entity level? Is that also because GIC may not have been interested in these portfolios, which would be considered part of our portfolio, below the upscale sort of level? Any color that you would want to throw on why or why not they may or may not be interested in these portfolios below the upscale level where we have a significant difference? I'd like to address it in two ways. I don't want to speculate on GIC's assessment of a broader portfolio. Having said that, last week, we checked our benchmarks. They continue to be a large holder of our stock in the public markets. It's public knowledge, and they've been a holder for a very long time, since IPO, actually. Without making any assumptions on their behalf, and as a management team, we believe that they have conviction on the overall business. Now, coming to this particular transaction, and I will repeat, this transaction involves a transaction where they have active involvement. That, obviously, as you know, is not possible in a public company. In a smaller private entity, GIC has the ability to have a higher influence, something that we wholeheartedly welcome, given their experience globally of investing capital in both the broader income-producing real estate and in the health sector. I think the deal is structured to maximize the benefits that both partners can bring to the platform. I do not think that it in any way has any aspersions on the balance portfolio. It is just that three hotels are easier to underwrite, easier to do due diligence on. Also, from our perspective, hotels like Hotel Smart Bengaluru, we have hedged them for 10 years. We've seen that hotel grow from zero to a fantastic performance. Both partners, I think, came to a point where we found the assets where we are very happy to cycle some of the capital, and they are happy to bring in fresh capital for future growth. It is where two people meet together. Lastly, do they have any put options? Thank you. Interrupting you, Mr. Kutha. I would request you to rejoin for follow-up questions. Sorry. If you can just allow us one last question on the deal. Does GIC, do they have any put options on the shareholders that they are required in these assets? No. There is no put option. Other than if there's an event of default for full transparency. Other than in an event of default, which is customary in a shareholders' agreement, there is no put option obligation on SAMHI Hotels. Understood. Thank you and all the best. Thank you. Request the participants to limit their questions to two participants. Thank you. The next question is from the line of Raghav Malik from Jefferies. Please go ahead. Hi, Ashish and team. Firstly, questions on securing the partnership. Just one question for me. I under these three assets, so 700 or keys, the portfolio will come under this partnership. You also mentioned any future upscale options will be connected to GIC costs. Also, these remaining, I think in this latest presentation, you said 2,000 total keys in the upscale portfolio. Would those be potentially coming under the purview of this partnership? That's my only question. Raghav, thank you. The way the transaction is structured, there is no obligation for us to transfer those assets to the platform. Having said that, very similar to a new opportunity in the upscale space, if we were to consider monetizing those assets because they are upscale, we will first take it to the platform. If we can get to a meeting of the minds on terms and valuation, then we'll offer it to the platform. If not, we do not have to. For the first two years, we in the upscale space will not take these assets to a third-party investor. After the two-year period, these assets that are left in the upscale space can either remain with us. If we want to transfer them to a third party, as we've done with the existing assets, we first take it to the platform. If not, then we can take it to any third-party investor. Okay. Even for the existing platform, at least the two-year period would be there to do in the platform and then maybe the. On the upscale space. Okay. Thanks a lot, Ashish. Thank you. Please limit your questions to two only. The next question is from the line of Rajiv Bharti from Nuvama. Please go ahead. Yeah. Good morning, sir. With regard to this SAMHI JV, when I see FS4 balance sheet, I see INR 330 crores, and you mentioned that it's a fancy fee. Between, let's say, in the last 10 or months, something has happened on that? It will become debt-free post-capital infusion by GIC, Rajiv. Okay. So. Apologies if it's miscommunicated otherwise. Currently, it continues to have the debt that was mentioned. After infusion by GIC, SAMHI JV will become debt-free. Can you specify, let's say, can you just check that number? Is SAMHI brought into the plan? Yeah. Yeah. Sure. SAMHI JV, 77 SAMHI JV, actually, the total impact of that data was INR 74.1 crores. Ascent Hotels was INR 47.6 crores. And Innmar was INR 6.7 crores. In December. This is trailing 12 months, December. December. Thank you. Thank you. Thank you, Rajiv. Thank you. The next question is from the line of Shahzad Shah from T-Meter Advisors. Please go ahead. Hi. Am I audible? Yes. Yes, you are. Thank you for the opportunity and congratulations on the transaction. A couple of questions. On the upscale part, earlier we were thinking of selling down 200-250 rooms from the mid-tier segment. The current transaction is more focused towards the upscale space. I want to understand if there is a change in thought process or strategy there, and are we still looking to sell down those rooms from the mid-tier segment? Second question would be, going forward, how will the future upscale acquisition transactions be structured? Does GIC come on board from day one, or SAMHI invests and acquires the 50 and does 50 development first, and then 50 to the JV? Asset recycling is independent of the segment. It is based on a couple of factors that we evaluate at the board level. It could be assets where we have questions on future growth, either because of market issues or the fact that the asset has really matured, and we do not expect it to be on a trajectory that we typically ask for for assets, right? To clarify, the asset recycling evaluation in the mid-tier portfolio continues. We believe that we will continue to recycle some more of our capital in those assets. When we give our guidance on next steps, we have not considered the impact on the asset because, as I said, still it is not done. It is not done. That is our belief, right? Why have we done this? I articulate it to begin with. We believe that we had invested in these assets other than Inmar. JV and Ascent had invested really early on. We've done a lot of hard work. We've created substantial value. It was only a fiduciary that we have that when we find a formidable partner like GIC, we are able to take some capital off those assets and use it for more productive purposes. In this case, on an immediate basis, the use is debt reduction. The reality is that debt reduction is eventually leading to a lot of freeing up of cash for growth. It's not that the purpose is debt reduction. It's interestingly a very desirable outcome. The end result is to effectively make sure the SAMHI balance sheet is geared for future growth. That's why we've done this. We are very happy with both the partners, the value that we've created in these assets, the capital that we are getting in the end use today and in future. To repeat myself, our evaluation of recycling third assets in the mid-tier space continues. We remain fairly optimistic, as we mentioned earlier, of including one of them at least in the course of the next six to eight months. The second part, which is future developments, will GIC come in for? If you see our business model, Shahzad, we don't do greenfield development. Generally, never say never. We have done some development historically. We may be doing Navi Mumbai if we are able to resolve the issues in the administration there. The purpose here is that if we find a new upscale opportunity, we will take it to the platform for it to evaluate. If the platform finds that opportunity attractive enough, then the platform gets to do that opportunity. If the platform either does not find the opportunity valuable or cannot meet timelines around that opportunity, then we have full flexibility to continue to execute on that opportunity. GIC would have a small catch-up period of 90 days, in which case they can come back and say, "While we couldn't do it in time, we can now do it." That is just to make sure that we respect the processes of a large investor such as GIC. There is full flexibility to execute on deals that we believe in. The short answer is no. If there is a deal that we see the platform like, it goes day one. Typically, we don't like buying pieces of land and doing development. We're not a developer. We are an asset manager. That is what we take pride in, and that is where we create value. The assets will come upfront into the platform. Understood. Thank you. Thank you. The next question is from the line of Sunil—I'm sorry. Sumant Kumar from Motilal Oswal. Please go ahead. Hi, sir. As per your commentary, the next EBITDA is going to reduce to 3.5. What is the next two-year target we are having for the next two EBITDA? As I said, Sumant, we are estimating that on closing of this transaction, once the first tranche of capital is infused, which is about INR 604 crore, our net EBITDA would be less than 3.5x. Obviously, that depends on where we close last quarter. In the next 12 months, given the pace that we are seeing in terms of EBITDA growth and performance of the hotel, plus the new inventory to some live and Holiday Inn Express portfolio, we are fairly, fairly confident to take net debt to EBITDA below 3x. That really sets the path for an accelerated landing at 2.5x, which we believe is a very healthy debt to EBITDA for a company like ours, which today has all long-term debt, which is between 12-14 years. For the next leg of growth, our cash flow will fund that growth, or will it increase the debt, or what? Any other growth? No, we have adequate cash flows coming through into the business to fund growth. Somantha, when I say that, there are always quarterly noises because of working capital, cash being utilized for growth. If you were to take a yearly view, I think the company has adequate cash and adequate access to cash coming from its own operations to fund growth. Leverage is not the source of capital for growth for SAMHI. My calculation, INR 16.4 crore is the deal value, and INR 2.8 crore deal by address to deal. That's the number, right? Yeah, approximately. Thank you. Thank you, Somantha. Thank you. The next question from the line of Sunil Jain from Nirmal Bang Securities. Please go ahead. Yeah. My question relates to the current company debt. I think it's something around INR 1,250 crore. And generally, if you calculate, then we will be at somewhere around 4.5x debt to EBITDA. So how you are planning to break it down as high cash as it is set for how it will be in JV? The total net debt in the company, including the subsidiaries which are a part of this transaction, will be INR 1,470 crore on closing. Basis that, we are estimating the net debt to be less than 3.5x, actually, even if you see trailing 12 months of the platform as of December 2024, you will see that number is very close to that. That is how our conviction comes off being less than 3.5x on closing. That is overall debt in SAMHI ourselves on a consolidated basis, and the EBITDA of the company on a consolidated basis. If you talk about just the parent part, because GV, you cannot have full right to use money in the parent company. So if the parent company. Just the standalone basis. Excluding the JV. Standalone. Other than JV? Oh, non-JV assets. In the non-JV assets, we will be at about 4.4x net debt to EBITDA on basis of December 2024. Yeah. So how are you planning to break it down? Because now the high cash assets will be JV. Yeah. The partners have agreed to put in place—and I'm using the word—a dividend policy or a cash distribution policy. Given the platform is going to be highly cash-generative, they reserve the right to make sure that the capital flows can be made available from that platform to both the shareholders, actually, GIC and SAMHI, to meet their requirements that they may have. We have structured the transaction in a way that we can have access to the free cash that the companies are generating if there be a requirement for us to do that. Any target for the standalone? How much debt to EBITDA you would like to reach in the next two years? I think our sense is that even in a non-platform asset, we maintain similar targets as we have for the overall portfolio. At the beginning, of course, the platform has much lesser leverage, and non-platform assets have a higher leverage. Because of the fact that, as I mentioned earlier, we have the ability to move cash, plus the fact that some of our growth assets like the W in Hyderabad, the new Sheraton rooms, the Holiday Inn Expresses that we've opened, they're all going live either this year or next year, you would see a substantial change in the EBITDA of, let's say, the non-platform assets. To answer you, our plan is to normalize debt to EBITDA across our portfolio, including the platform and 100% owned assets. The question relates to the. Mr. Jakhanwala, I'm sorry to interrupt you, sir. I will request you to rejoin the queue for your question. Thank you so much. We'll take the next question from the line of Mukesh Rankar from ARM Company. Please go ahead. Hello. My question has been answered. We can move to the next one. Thank you. We'll take the next question from the line of Nettie from P/E Alpha Fund. Please go ahead. Hi, sir. Thank you for taking my question. My question is that this is a strategic decision in terms of. I know definitely we have in the next three weeks just a steam and fuel. I just wanted to ask one question to see the revenue for seed planning. That would also be coming online in a few days. They would also not be contributing. Is that understandable? Nettie, the existing 142-room hotel is operating. We'll continue to operate through FY 2026. It will go under renovation in FY 2027. As we have mentioned earlier, we do not expect a shutdown of the hotel for a prolonged period of time. It could be a small period of two to three months where we will have to take the hotel out of operations when we do the public areas. Other than that, the intent is to do renovation in part as we operate the hotel. We will immediately start creating the new building for the proposed Westin. When I say immediately, of course, it's based on the approvals from local sanctioning authorities. We do expect that to start sometime towards the end of the current financial year. The current existing hotel, which is the Trinity, continues to operate. We have an investment agreement with Marriott for them to start providing us some support during the current year, even though the hotel will not be rebranded. With that support, we do expect that the performance of this hotel will be seen materially upside, actually even prior to us investing substantial capital of rebranding. Got it. Required here, how much is doing the rebranding? The rebranding side is coming from what partners? How much is the total? 75 is the total invested capital there. You are absolutely right. Of that, INR 149 crore comes from the partner, and the rest will be funded by SAMHI. Actually, sorry, the rest will be funded in the ratio of 65/35. All right. Got it. That's it. Thank you. Thank you so much. Thank you. Ladies and gentlemen, we will take this as the last question for today, which is from the line of Sourabh Gilda from JM Financial. Please go ahead. Yes. Hi. Am I audible? Yes, you are. Yes. I just have one question. What is the specific timeline for the project of this transaction? Thank you for asking this question, Saurabh. The advice that we had received from the councils was that because we're not seeking control in a material subsidiary, it did not require any specific shareholder consent. We are quite aware of our status as a professionally managed company. Therefore, for governance, we want to seek a shareholder's consent. I think the notice will be issued pretty soon, today or tomorrow. We expect the EGM to be called third week of May. I think I would believe that between 45-60 days, we would close the transaction, at which point in time, INR 604 crore will be infused in a single tranche. Inmar transaction will obviously come in Q2 and subsequently over the next 24 months. Okay. Got it. Thank you. Thank you. Thank you, Saurabh. Thank you, sir. As that was the last question, I would now like to hand the conference over to Mr. Ashish Jakhanwala for closing comments. Over to you, sir. Thank you, everybody. I know we have not been able to address everybody's queries, but SG Advisors, who are IR Advisors, are going to be reaching out to all of you analysts and investors. We will make ourselves available over the course of the next week, 10 days. If there be any incremental queries or concerns, happy to address them. We understand we had given very short time to this call, but we felt that nevertheless, it is a good starting point. As I said earlier, we are permitted to address any further questions that you may have over a period of time. Thank you for your time, and look forward to speaking to you soon. Thank you, members of the management. On behalf of SAMHI Hotels Limited, we conclude this conference. Thank you for joining us. We will now disconnect the line. Thank you.