Investors seem to be checking-out of Indian Hotels for now. The stock has been down consistently and today, it is down over 4.5% at Rs.104.90 with an intra day low at Rs.103.60.

The market is jittery about the its lease agreement of Taj Mansingh Hotel in Delhi with New Delhi Municipal Corp (NMDC), which owns the land on which the 11-storey hotel near India Gate stands. This came to an end in October 2011 and since then, there have been 7 extensions to the lease. Indian Hotels Company had claimed part ownership of the Taj Mansingh hotel in an injunction filed in 2013.

Yesterday, NMDC gave its final 3-month extension and there is now concern about where this will head.  Indian Hotels has said that it has spent so much on developing this hotel and its infrastructure thus stating it rightfully has an equity stake in the hotel. The High Court has assured the company that it can seek legal recourse if NMDC takes coercive action. The market is thus very uncomfortable with this bitter developing situation.