Lemon Tree Hotels scores IPO approval

Lemon Tree Premier, Jaipur, India

The Securities and Exchange Board of India (SEBI) gave approval for New Delhi-based Lemon Tree Hotels to sell shares of its company in an initial public offering. The hotel chain, backed by Warburg Pincus, is the 46th firm to received clearance for IPOs this year. 

Lemon Tree’s application for the sale, which was submitted on September 21, includes the sale of 195.79 million shares by Warburg Pincus and other promoters. Through its investment subsidiary, Maplewood Investments, Warburg Pincus will sell half of its 192.9 million shares, which will drop to approximately 12.51 percent from 24.53 percent. 

After the sale, which totals between Rs1,000 and 2,000 crore, the shares will drop 24.9 percent. Lemon Tree will not receive any proceeds from the sale; the total will go to shareholders. VCCircle estimates that the hotel company will be worth about Rs4,820 crore once the sale is complete. 

FREE DAILY NEWSLETTER

Like this story? Subscribe to Operations!

Hospitality professionals turn to Operations as their go-to source for breaking news on guest rooms, food & beverage, hospitality trends, management, and more. Sign up today to get news and updates delivered to your inbox daily and read on the go.

Bankers Kotak Mahindra Capital, CLSA India, JP Morgan and Yes Securities are managing the sale. Law firm Luthra &Luthra Law Offices will counsel these merchant bankers. Shardul Amarchand Mangaldas will represent Lemon Tree Hotels, and Sidley Austin will be the international counsel to underwriters. 

The hotel company owns and/or operates 4,289 guestrooms in 40 hotels across 24 cities in India under its Lemon Tree Premier, Lemon Tree Hotels and Red Fox brands. Lemon Tree owns 19 hotels with three that are on leased or licensed land, leases five hotels and manages 13.

Between 2016 and 2017, Lemon Tree Hotels raised Rs411.93 crore in revenue, a 17.7-percent increase from 2013 and 2014.

Suggested Articles

The country's first Radisson hotel will open in late-2021 in the city of Perm.

Ahead of next year's IHIF in Berlin, Corinthia's SVP/Hotel Development Paul Pisani shared how the company is wrangling new trends in luxury travel.

The company experienced an 0.8 percent decline in revenue per available room in constant currency and a 1.9 percent decline at actual exchange rates.