Warburg Pincus to invest ₹960 crore in Fleur Hotels, buy 41.09% stake

Lemon Tree Hotels announces strategic reorganisation, Fleur to be listed on bourses separately

American multinational private equity firm Warburg Pincus is set to invest Rs 960 crore for the growth of Fleur Hotels of Lemon Tree Hotels as part of a group reorganisation exercise, the country’s third-largest hotel chain announced on Saturday.

 

The firm will also buy out 41.09 per cent stake in Fleir Hotels from Dutch pension fund APG.

 

“The scheme, to be implemented through an NCLT-approved process, will reorganise the group’s asset ownership and operating structure. The hotel assets currently owned by Lemon Tree will be transferred to Fleur, which will serve as the group’s exclusive asset ownership and development company,” the company stated in a release.

 

 

Fleur will lead all of the group’s future hotel acquisitions and development, while Lemon Tree will transition into a fully asset-light model, “focused on growing its hotel management, franchising and digital business.” It added.

 

Fleur Hotels will also be listed on the bourses separately, in the coming 12-15 months.

 

“This scheme is intended to create a simplified, transparent, and growth-oriented structure for both companies, which we believe will enhance long-term value for our shareholders,” said Patanjali Govind Keswani, founder and executive chairman of Lemon Tree and Fleur Hotels.

 

Keswani will serve as the executive chairman of Fleur Hotels and will eventually transition to a non-executive role at Lemon Tree, the release added.

 

“This collaboration marks a defining moment as we enter the next phase of expansion for Fleur. With the Indian hospitality industry at an important inflection point, we look forward to leveraging Warburg Pincus’ global network and deep real estate and hospitality experience to scale responsibly, advance digital-led capabilities, and embed sustainability as a core pillar of Lemon Tree’s and Fleur’s long-term growth journey,” he added.

 

Once the transaction is completed, Fleur will evolve into one of the largest owners of hospitality assets in India, with its owned portfolio expanding significantly to 5,813 keys across 41 hotels from 3,993 keys and 24 operating hotels currently.

 

Meanwhile, Lemon Tree will continue to operate its existing leased hotels in Indore and Aurangabad, which are approaching the end of their respective lease terms.

 

In addition, Lemon Tree will manage an additional 1,820 keys and 17 hotels transferred to Fleur alongside its existing portfolio of 3,993 keys and 24 hotels of Fleur operated by Lemon Tree.

 

“We are pleased to once again partner with Patanjali Keswani and the Fleur leadership team to support the next chapter of growth for the platform. Lemon Tree has played a pioneering role in shaping India’s mid-market hospitality segment… with favourable industry fundamentals and a clear strategic roadmap, we look forward to supporting the team as they continue to scale the business,” said Anish Saraf, managing director at Warburg Pincus.