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.
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.