After Goa and Sikkim, now a Casino is being built by Daman Hospitality Pvt. Ltd (DHPL) is raising Rs35 crore from Madison India Real Estate Fund Ltd, a $150 million (Rs698 crore) fund managed by Paracor Capital Advisors Pvt. Ltd,
DHPL is building the casino at a resort in the Union territory of Daman near the west coast in Maharashtra.
The resort is being developed and managed by the $172 million, New York-listed gaming, entertainment and hospitality chain Thunderbird Resorts.
Srinidhi Rao, country head of Thunderbird, confirmed the development.
Paracor's previous investments in realty have been in hotel chain Sabari Inn and a residential development near Chennai.
In India, casinos are legal only in Daman and Diu, Goa and Sikkim.
The private equity (PE) investment in an Indian casino comes at a time when the global industry is facing depressed consumer spending and huge debts.
Station Casinos Inc., one of the largest in Las Vegas, US, which became the biggest PEcontrolled firm to file for bankruptcy earlier this year, is a case in point.
The deal is interesting in the Indian context, too. PE deal flow in leisure and hospitality businesses, largely driven by consumer sentiment and discretionary spending, has suffered a steep fall in the first nine months of calendar 2009.
Even though PE firms invested $127 million across 11 deals in January to September last year, they pumped in only $40 million over nine deals so far in 2009, according to VCCEdge, the financial research platform of VCCircle.
DHPL's casino, which aims to start operations by the end of this year, will be branded as Fiesta and have a gaming licence under the Gambling Act of Goa, Daman and Diu, 1976.
The project, spread across 40,000 sq. ft, is expected to cost around Rs375 crore, including a 200-room resort. The casino is expected to have 500 electronic slot machines and will host games such as poker, blackjack and roulette.
DHPL is promoted by Ketan Patel, son of former Daman and Diu Congress MP Dahya Patel.
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