Sebi Approves The Lemon Tree Hotel IPO

One of India’s largest hospitality chain Lemon Tree Hotels has finally heard a yes from capital market regulator Sebi to float an initial public offer. With this, a total of 46 firms have finally received a clearance for IPOs in 2017, as per the information present on SEBI’s website.

Sebi Approves The Lemon Tree Hotel IPO

In September, the hospitality chain had filed the draft red herring prospectus (DRHP) with Sebi and got its notes on December 22, which is obligatory for any company to launch a public offer. As per the draft papers, the public offer of Lemon Tree Hotels’ consists of sale of up to 195,797,000 equity shares by the current shareholders. The list of shareholders includes Maplewood, Whispering Resorts, Palms International and RJ Corp.

The offer will hold up to 24.90% of the paid up equity share capital of the company. The public issue aims to achieve the advantages of listing the equity shares on stock exchanges.

In the DRHP, the company said that it expects that listing of the equity shares will enhance the brand image as well as the visibility and at the same time provide liquidity to shareholders. The equity shares will also get a public market through liquidity in India. The company’s public issue would be managed by Kotak Mahindra Capital CLSA India, J P Morgan India and YES Securities. It is believed that the equity shares would be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The Lemon Tree chain has a total of 40 hotels with 4,300 rooms in 24 cities across the nation. The hospitality chain was founded in 2002 by Patu Keswani. It has hotels under four brands namely Lemon Tree Premier, which is a high-end premium brand; Lemon Tree Resorts, which is a leisure segment brand; Lemon Tree Hotels, a medium-ranged brand and Red Fox Hotels, which is an economy brand.