Amid family feud and turmoil, EIH-owned Oberoi Hotels Group to develop two hotels in Pune and London

EIH Ltd, the parent company of the Oberoi and Trident hotel brands, has announced two major new projects in Pune and London. However, amid these expansions, the company is also facing a legal challenge from Anastasia Oberoi, daughter of the late PRS Oberoi, who is disputing being disinherited from the family and seeking a larger share of the Oberoi estate.

In Pune, the company said in a filing late on Monday night that it has acquired a majority stake in Muttha Towers II Private Ltd, a unit of real estate firm Muttha Group, with assets valued at ₹1750 crore. EIH will deploy ₹254 crore in the Muttha business, which was launched in 2019 and has a 1.7-acre plot of land in the city. The company will build a Trident hotel on the property, covering an area of ​​about 181,000 square feet with about 175 rooms.

It will also feature commercial development, including office space and restaurant areas, supporting retail stores, covering 408,000 square feet. ₹EIH said in a filing to the Bombay Stock Exchange that it had a net profit of Rs 972 crore. The hotel and other businesses around it will open in five years, i.e. in the first quarter of fiscal 2030. The company currently has 12 hotels in India and another nine in other parts of the world. The company primarily owns and manages its hotels but also signs management contracts with other hotels and charges fees.

In a separate statement, EIH also said it has now set up a new company, EIH London Investments Ltd, to develop an Oberoi hotel in the UK. Indian parent EIH will hold a 51% stake in the company. The company will build an Oberoi-branded hotel in London. The hotel is expected to open in fiscal 2028. The parent company of the Oberoi Group reported a 9% year-on-year decline in profits in the first quarter of fiscal 2025, with operating income falling 5% from the previous quarter.

“Their growth plans have accelerated with the recently announced projects, not just in India but also internationally. The FY24 financial report is excellent. The quality has not been compromised and the focus on service quality has not diminished. Arjun (Oberoi) has been leading developments over the years like Sukhvilas, their hotels in the UAE and Morocco to name a few. The focus on aesthetics and unique design is their legacy but you can see some unique touches in the new developments and the latest refurbishments of existing hotels along with contemporary F&B concepts like Bay Club and Dhilli etc. So, I don’t think there is any compromise,” said Rattan Keswani, a hospitality veteran who has headed Lemon Tree Hotels and the Oberoi Group. They are now looking at opportunities in both the domestic and international markets.

“Investors not only look at financial strength but also growth. I believe they are on the right track,” Keswani said.

Earlier this year, EIH also announced plans to enter Tier III cities, Managing Director and CEO Vikramjit Singh Oberoi had said. Its future projects include a portfolio of owned and managed properties such as the palace near Khajuraho, the Rajgir Palace in Madhya Pradesh and the Jungle Resort in the state. In August last year, Reliance Industries also signed an agreement with Oberoi Hotels & Resorts through its Reliance Strategic Business Ventures Ltd, which owns nearly 19% stake in Oberoi EIH, to jointly manage two properties in the country and one in the UK.

Elsewhere in the court

Anastasia Oberoi, daughter of the late PRS Oberoi, who passed away in November 2023, is currently locked in a legal standoff with EIH. The dispute revolves around her claim to her rightful share of the family estate and her stake in the company. She reportedly disputes that she has been excluded from a portion of the family wealth, especially the stake in EIH. Her legal challenge is aimed at securing a larger portion of the Oberoi estate, raising concerns about how the estate will be distributed following Oberoi’s death last year.

The Delhi High Court has granted an interim relief order to Anastasia, daughter of late hotel tycoon Prithvi Raj Singh Oberoi, restraining EIH and its holding companies Oberoi Hotels Private Ltd (OHPL) and Oberoi Properties Private Ltd (OPPL) from transferring their shares. The order was in response to a suit filed by Anastasia to enforce her father’s will, alleging that her brother Vikramjit Singh Oberoi and cousin Arjun Oberoi had obstructed its execution.

In a 19-page order, Justice Navin Chawla noted that Anastasia had proved the prima facie validity of the will and had made a “prima facie case” in her favour. The court found it necessary to restrain the parties from alienating or transferring any shares in the holding company in the interest of justice.

Besides, the court also protected Anastasia’s possession of the family property ‘Ashiana Villa’ in Kapashera, Delhi by restraining cousins ​​Vikramjit (son of PRS Oberoi) and Arjun (his nephew) from interfering with Anastasia and her mother’s possession of the property.

The dispute centred on the will of PRS Oberoi dated October 25, 2021, which was challenged by family members including Vikramjit and Arjun, who said it did not reflect the wishes of PRS Oberoi’s father, MS Oberoi. They were seeking shares in the holding company based on an earlier will dated March 20, 1992.

In her complaint, Anastasia argued that Vikramjit and Arjun were planning to sell the shares, which would be a violation of her rights. She claimed that instead of transferring the shares held by PRS Oberoi in OHPL and OPPL as per the will, the executors were considering selling the shares to Vikramjit and Arjun at a price determined by them. Anastasia argued that this would be a violation of her rights and those of the two trusts, of which she was the sole and ultimate beneficiary named in the will.

Cousins ​​Vikramjit and Arjun countered that according to PRS Oberoi’s will, the shares could only be transferred to blood relatives and not to a trust. They also supported the will dated March 20, 1992 and an oral family agreement, in which they claimed that the shares were owned by them. They argued that the correct procedure was to seek probate and that Oberoi needed to provide them with an opportunity to purchase the shares before transferring them.

Despite their objections, the court found the October 2021 will to be reliable and ruled that probate is not currently required. Mint“For now, we are happy with the interim order as it reflects what we have sought from the court. We will see whether Vikramjit and Arjun file an appeal and challenge the order in a higher tribunal. Also, we have not seen or received a copy of the 1992 will they relied on as it has not been produced before the court till now.”

“I don’t think it will affect the brand, but if the court rules in her favour, then the conflict will become very big, similar to the Kalyani family story. Anastasia may not necessarily be interested in joining the group, but the group may look to buy out her shares,” said a person with indirect knowledge of the matter.