Lemon Tree gains 12% on JV with Warburg Pincus to create co-living platform

The stock rallied 12% to Rs 77.15 on BSE after the company has formed a JV with an affiliate of Warburg Pincus, a leading global private equity firm, to create a co-living platform.

Shares of Lemon Tree Hotels rallied 12% to Rs 77.15 apiece on BSE in early morning trade after the company has formed a joint venture (JV) with an affiliate of Warburg Pincus, a leading global private equity firm, to create a co-living platform.

The JV marks Lemon Tree Hotel, lndia's largest hotel chain in the mid-priced sector, entry into an adjacent but new business segment focusing on the development of institutional-grade rental housing accommodation serving both students and young working professionals across major educational clusters and key office markets in India.

The JV partners will initially invest Rs 15 billion in equity over a period of time followed by an additional infusion of Rs 15 billion in equity at the option of the partners, to develop rental housing projects through a combination of greenfield purpose-built properties, refurbishment of existing under—managed/stressed commercial and residential assets taken on lease/acquisition basis as well as management of existing for rent accommodation projects, the company said in a press release.

At 10:00 am, Lemon Tree Hotels was trading 8% higher at Rs 74.30 on BSE, as compared to a 0.91% rise in the S&P BSE Sensex. The trading volumes on the counter jumped more than 9-fold with a combined 1.51 million equity shares changed hands on the BSE and NSE so far.