Warburg Pincus to Invest ₹960 Crore in Lemon Tree’s Asset Owning Arm Fleur Hotels

13 Jan 2026 , 11:54 AM

Lemon Tree Hotels on Saturday said its board of directors has approved a strategic transaction involving the acquisition of a 41.09 percent stake held by APG Strategic Real Estate Pool NV in its subsidiary Fleur Hotels.

The transaction includes a proposed investment of ₹960 crore, to be infused in multiple tranches as part of a broader strategic reorganisation approved by the board. The stake acquisition will be executed by Coastal Cedar Investment BV, an affiliate of Warburg Pincus, which will acquire the shares from APG Strategic Real Estate Pool NV.

Lemon Tree said the board has also approved a strategic reorganisation plan, under which Fleur Hotels will be listed as a separate entity, while Lemon Tree Hotels will transition into a pure play, asset light hotel management and brand platform.

Under the proposed structure, Fleur Hotels will function as the group’s exclusive hotel asset ownership and development company, housing all owned hotel assets and leading future acquisitions and development initiatives.

The company stated in a regulatory filing that the strategic reorganisation, along with Warburg Pincus’ investment in Fleur Hotels, is expected to unlock long term shareholder value by creating two focused, scalable, and high growth platforms.

The restructuring will be implemented through a composite scheme of arrangement, subject to approvals from regulatory authorities, shareholders, and the National Company Law Tribunal.

As part of the scheme, hotel assets currently owned by Lemon Tree Hotels will be transferred to Fleur Hotels, which will also spearhead all future hotel acquisitions and development for the group.

Founder Patanjali Govind Keswani said the scheme is aimed at creating a simplified and transparent structure that supports sustainable growth and enhances long term value for shareholders. Keswani will take on the role of Executive Chairman of Fleur Hotels and is expected to transition to a non executive role at Lemon Tree Hotels over time.

Anish Saraf, Managing Director at Warburg Pincus, said Lemon Tree has played a pioneering role in developing India’s mid market hospitality segment and has built a strong portfolio backed by established brands and operating capabilities.

As part of the internal restructuring, Lemon Tree Hotels will merge its wholly owned subsidiaries Carnation Hotels and Hamstede Living into itself, while four other subsidiaries will be merged into Fleur Hotels.

Additionally, 12 hotels will be demerged into Fleur Hotels, including a hotel under construction in Shimla and an investment in a hotel project located in Shillong. The company said the proposed listing of Fleur Hotels on the NSE and BSE is expected to be completed within a timeframe of 12 to 15 months, subject to necessary approvals.

Post completion of the transaction, Fleur Hotels is expected to become one of the largest hospitality asset owners in India, with its portfolio expanding from 3,993 keys across 24 hotels to 5,813 keys across 41 hotels.

Lemon Tree Hotels will continue to operate its leased hotels in Indore and Aurangabad and will manage an additional 1,820 keys across 17 hotels that will be transferred to Fleur Hotels, alongside its existing managed hotel portfolio.

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