DRMumbai: Mid-priced Hospitality chain company Lemon Tree Hotels Ltd. launched its Rs.1040-crore initial public offer (IPO) on March 26, allowing promoters to sell part of their stake. Promoters, private equity firm Warburg Pincus, and Dutch pension fund APG, will offload 18.5 crore shares or 23.59 per cent stake in the three-day offer at a price band of Rs.54 to Rs.56 apiece.
The higher price values the company at Rs.4403 crore, according to BloombergQuint’s calculations. The three-day share sale will close on March 28. Warburg Pincus, through its investment arm Maplewood Investments, will sell 94.50 million shares in the New-Delhi based hospitality chain, paring its stake to 12.51 per cent from 24.53 per cent currently, as per the red herring prospectus.
Other shareholders selling stake include RJ Corp, RKJ HUF, Five Star and Palms International. Together, the promoters hold 31.11 per cent stake while private equity investors and non-promoter shareholders hold the remaining 68.89 per cent stake, according to the RHP. Kotak Mahindra Capital, CLSA India, JPMorgan India and YES Securities are the book-running lead managers for the issue.
Founded by Patanjali Govind Keswani in 2002, Lemon Tree operates under three brands associated with different hotel segments: The upper-mid-scale category called Lemon Tree Premier, mid-scale segment Lemon Tree Hotels, and economy hotels under Red Fox. It is India’s largest hotel chain in the mid-priced segment, and the third-largest on the basis of its controlling interest in owned and leased rooms. It is the ninth-largest chain in terms of owned, leased and managed rooms.
