Siprabhya Hotels and Resorts Private Limited (SHRPL) is developing a 75-key luxury hotel and resort, The Oberoi Kathmandu, in Rabi Bhawan, Kathmandu, with an estimated project cost of Rs 7.124 billion. The project is being developed under a hotel management tie-up with The Oberoi Hotels and Resorts Limited, India, and construction commenced in June 2025. According to the latest assessment by ICRA Nepal, The Oberoi Kathmandu had achieved around 38% overall financial progress and approximately 57% civil construction progress as of mid-July 2026. The company is currently targeting the commencement of hotel operations in September 2029, revising its earlier target of June 2029.
Rs 7.12 Billion Project with 60:40 Debt-Equity Structure
The Oberoi Kathmandu is being developed at an estimated cost of Rs 7,124 million, with a debt-to-equity ratio of 60:40. The project translates into an estimated investment of approximately Rs 95 million per key, while the debt component stands at around Rs 57 million per key. ICRA Nepal has identified the relatively high project cost and debt burden per key as factors that could place pressure on the company’s financial profile during the initial years of operation.
As of mid-June 2026, the promoters had already infused approximately Rs 2.4 billion, representing around 84% of the total equity requirement of Rs 2.85 billion. The rating agency expects the promoters to infuse the remaining approximately 16% of the required equity in a timely manner.
Construction Progress Reaches 38%
The project remains in the construction phase, with work actively progressing since June 2025. ICRA Nepal reported that the project had achieved approximately 38% financial progress by mid-July 2026, while civil construction progress stood at around 57%.
The agency has taken note of the satisfactory progress in civil structures, particularly as the project is being executed under an Engineering, Procurement and Construction (EPC) contract containing penalty clauses for delays. The contract finalization process for mechanical, electrical and plumbing (MEP) works was also at an advanced stage and was expected to be concluded soon.
Foreign Currency Components Create Cost Escalation Risk
While construction has progressed, several major components of the project are yet to be finalized, particularly plant, machinery and equipment, which are expected to be procured largely in US dollar-denominated terms. ICRA Nepal has highlighted the potential exposure to cost escalation from these components, particularly amid adverse global economic and geopolitical developments.
The Oberoi Kathmandu’s ability to make satisfactory progress on the remaining components and complete the project within the Rs 7.124 billion budget and revised September 2029 timeline will therefore remain a key rating monitorable. Any significant delay or cost overrun could affect the project’s financial profile and the time required to stabilize operations.
Oberoi Brand Association Expected to Support Market Position
One of the key strengths identified by ICRA Nepal is The Oberoi Kathmandu’s association with The Oberoi Hotels and Resorts, a renowned international luxury hospitality brand. The Oberoi group has a global presence and a large customer base, while its established operating standards are expected to support the new property’s positioning in Kathmandu’s luxury hospitality market.
ICRA Nepal expects the brand association to potentially support the hotel’s initial customer acquisition and occupancy once operations begin. The partnership is also expected to provide operational support during the development and eventual commencement of hotel operations.
Siddhartha SJB Rana Leads Promoter Group
The project is primarily promoted by Siddhartha SJB Rana, who holds a 60% stake in Siprabhya Hotels and Resorts Private Limited. The remaining ownership is held through two institutional shareholders, Surya Enterprises Private Limited and SR Holdings, with each holding a 20% stake. Both entities are majorly held by Rana.
ICRA Nepal has considered the promoters’ financial resourcefulness and business experience as a supporting factor for the project. The promoters’ ability to inject around 84% of the required equity by mid-June 2026 has also provided comfort to the rating agency regarding the project’s funding visibility.
ICRA Nepal Reaffirms Long-Term Rating and Assigns Short-Term Rating
ICRA Nepal has reaffirmed the long-term loan rating of [ICRANP] LB+ assigned to Siprabhya Hotels and Resorts Private Limited and has newly assigned a short-term loan rating of [ICRANP] A4. The ratings cover total loan limits of Rs 4.274 billion.
| Instrument | Amount | Rating | Action |
|---|---|---|---|
| Long-Term Loan Limits | Rs 4,274 million | [ICRANP] LB+ | Reaffirmed |
| Short-Term Loan Limits within the above | Rs 2,800 million | [ICRANP] A4 | Assigned |
| Total | Rs 4,274 million |
ICRA Nepal’s assessment was published on September 3, 2026.
High Project Cost Could Extend Stabilization Period
The hotel’s relatively high investment per key and debt burden are expected to create pressure during its initial operating years. Luxury hotels generally require time to achieve optimal occupancy levels, room rates and operating efficiencies. Given the scale of investment in The Oberoi Kathmandu, ICRA Nepal expects a relatively extended stabilization period before the project reaches its targeted operational performance. The company could also require additional promoter support in case operational cash flows during the initial years are insufficient to meet financial obligations.
Kathmandu Hospitality Market Remains Highly Competitive
The project will enter a competitive Kathmandu hospitality market that already has several high-end hotels and resorts, including properties operated under international hotel chains. The increasing presence of international brands and upcoming luxury properties could intensify competition for high-spending domestic and international customers.
However, ICRA Nepal has noted that The Oberoi Kathmandu is targeting a niche luxury customer segment, which could provide some differentiation within the market. Despite this, established luxury properties with relatively lower debt burdens could create pressure on occupancy and room rates, particularly during periods of weaker tourism demand.
Tourism Growth Provides Long-Term Opportunity
ICRA Nepal has highlighted the government’s continued focus on tourism promotion as a positive factor for Nepal’s hospitality sector. The government has emphasized tourism promotion through policy support, infrastructure development and international marketing. In its FY2026 budget, the Government of Nepal announced plans to recognize hotels as a productive industry, making them eligible for benefits and facilities similar to those provided to other productive industries.
Nepal’s strategic location between India and China, two of the world’s most populous countries, also provides a sizeable potential market for tourist and business visitors. Growing international tourist arrivals in recent years are expected to support the long-term development of Nepal’s tourism and hospitality industry.
Hospitality Business Exposed to Seasonality and External Shocks
Despite the long-term growth potential, ICRA Nepal has pointed out that the hospitality industry remains highly sensitive to seasonality and changes in travel patterns. Tourist arrivals can be affected by broader economic conditions, tourism policies, geopolitical developments, natural disasters and regulatory or macroeconomic changes. Such factors can directly influence hotel occupancy, room rates and overall cash flows. The company will therefore remain exposed to market fluctuations until its operations achieve stable occupancy and revenue levels.
Timely Completion and Successful Operations to Remain Critical
Going forward, the company’s ability to complete The Oberoi Kathmandu within the budgeted cost and revised September 2029 timeline will remain one of the key factors monitored by ICRA Nepal. The successful completion of pending project components, particularly those involving foreign currency exposure, will also be important in controlling the risk of cost escalation. Once operations begin, the hotel’s ability to achieve targeted occupancy, room rates, revenues and operating margins will determine its financial performance and debt-servicing capacity.
With construction progressing, substantial promoter equity already injected and the Oberoi brand attached to the project, The Oberoi Kathmandu is being positioned as a new luxury hospitality property in the capital. However, its eventual financial performance will depend on timely project execution, cost control and successful stabilization in Kathmandu’s competitive luxury hotel market.
