Vatika Hotels Refinances ₹550 Crore Debt With Kotak Mahindra Bank, Exits India Special Assets Fund III
Hospitality Operator Refinances High-Cost Debt Through Traditional Banking
Vatika Hotels has secured ₹550 crore in refinancing from Kotak Mahindra Bank, allowing it to exit India Special Assets Fund III. The operator of The Westin Gurgaon completed a major debt restructuring by securing the funds from the bank.
Interest Expense Relief and Credit Rating Recovery
The move is expected to reduce the company's borrowing costs by 8-9% and follows a period of financial recovery post-pandemic. By moving to more traditional bank financing, the company expects to reduce its annual interest expenses by 8-9% while also benefiting from more favorable repayment timelines.
Total debt dropped from approximately ₹1,000 crore in early 2023 to under ₹600 crore by mid-2024. After falling into a default status during the 2021 financial year, the company successfully reached a BBB investment-grade credit rating by December 2025. This rating improvement marks a milestone in the company's turnaround, as achieving an investment-grade rating is often a critical milestone for companies looking to replace high-cost, short-term debt with cheaper, long-term bank loans.
Exiting a Structured Asset Fund
The deal enables the exit of India Special Assets Fund III, managed by EAAA India Alternatives. The fund represented high-cost bridge financing during the company's period of financial stress. The company had undergone a multi-year turnaround to address financial stress that previously led to payment defaults on loans from lenders including Piramal Capital and Goldman Sachs.
About Vatika Hotels
Vatika Hotels, established in 2004 as part of the Delhi-NCR-based Vatika Group, operates in the luxury hospitality segment. The company operates 5 star deluxe hotels in the heart of Gurgaon, 'The Westin Gurgaon-New Delhi' and a 5 star resort spread across 37 acres of lush green land in Sohna, 'The Westin Sohna Spa & Resort' that are fully operational.