Lemon Tree Can Also Launch Rs 800 Crore IPO:
Delhi-based hotel chain Lemon Tree Hotels has appointed Kotak Capital Markets, CLSA and JP Morgan as merchant bankers for its initial public offering that is expected to mop up around Rs 800 crore, according to sources in the industry.
Lemon Tree is backed by Warburg Pincus and the IPO will provide the company an opportunity to encash its investments. The private equity giant holds 20-25 percent stake in the company. Lemon Tree and Warburg didn’t respond to Moneycontrol’s queries. The IPO may comprise stake sale by promoters as well as issue of fresh shares.
Lemon Tree started in 2002 as a mid-market hotel chain but has since come to own premier luxury and budget properties as well. It owns and manages more than 4,100 rooms across 42 properties in 25 cities of India with plans to enter two more cities soon. It, currently, has more than 4,000 employees.
By 2019, Lemon Tree aims to own and operate over 8,000 rooms in 60 hotels across 40 major cities.
The hotel chain operates its properties under four brands — Lemon Tree Premier for upmarket segment, Lemon Tree Resort for leisure, Lemon Tree Hotels for midscale properties and Redfox for budget-conscious customers.
The Patu Keswani-owned chain also has a subsidiary GreyFox Project Management for executing hotel projects on a limited or turnkey basis. Lemon Tree has a management arm called Carnation Hotels.
Running a hotel has always been a challenging business in India, the industry suffering from lack of good choices for land and high real estate prices, not to forget the high taxes being imposed on it due to its luxury tag.
Hoteliers expected the government to do some justice to the industry with GST but the announcement of multiple rates under the new regime has been disappointing.
The GST Council has fixed the GST rate for hotels charging room rentals between Rs 1,000 and Rs 2,500 at 12%, Rs 2,500 and Rs 5,000 at 18% and above Rs 5,000 at 28%.
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Housing and Urban Development Corporation Ltd IPO (HUDCO) listing is also successfully completed.
PSP Projects Ltd(PPL) IPO bidding is also over. .
Indigrid Invit Fund IPO bidding also able to close successfully on May 19, 2017.
Some SME IPO will also be active in market in coming week.
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