Third Largest India's Hotel Chain Business: Strategic Reorganisation and Warburg Pincus Investment

Lemon Tree Hotels Limited has approved a Composite Scheme of Arrangement aimed at simplifying its corporate structure and unlocking long-term value for stakeholders. As part of this strategic reorganization, the group will be bifurcated into two focused, high-growth platforms. Lemon Tree Hotels will transition into a pure-play, asset-light hotel management and brand platform, while Fleur Hotels Limited will operate as a large-scale hotel ownership and development platform.

A key highlight of this restructuring is the entry of global investment firm Warburg Pincus, which will acquire APG’s entire 41.09 per cent stake in Fleur Hotels. In addition, Warburg Pincus has committed a primary investment of up to Rs 960 crore to support Fleur Hotels’ long-term expansion strategy. Under the scheme, all hotel assets currently owned by Lemon Tree will be transferred to Fleur Hotels, which will subsequently be listed on both the NSE and BSE.

Post-transaction, Fleur Hotels will emerge as one of India’s largest hospitality asset owners, with its portfolio expanding from 3,993 keys to 5,813 keys across 41 hotels. Patanjali Govind Keswani, founder of Lemon Tree Hotels, will take on the role of Executive Chairman at Fleur Hotels, providing continuity and strategic oversight.

This reorganisation is positioned to capitalise on the rapid growth of India’s hospitality sector, driven by increasing disposable incomes and rising domestic as well as international travel demand.

Lemon Tree Hotels Limited is one of India's largest hotel chains, operating a diverse portfolio of brands across the upscale, upper-midscale, midscale, and economy segments. The company currently manages over 110 hotels in more than 75 cities in India and abroad, with a growing pipeline of over 120 new properties. It serves over 1.5 million guests annually in locations ranging from major metropolitan areas like Delhi-NCR, Mumbai, and Bengaluru to smaller tier II and III cities, as well as international destinations such as Dubai, Bhutan, and Nepal. Since opening its first hotel in 2004, the group has expanded to over 230 properties (operational and upcoming), establishing a trusted name in the hospitality industry for both business and leisure travelers.

The stock price is trading 35 per cent above its 52-week low.

Disclaimer: The article is for informational purposes only and not investment advice.