Lemon Tree Hotel, At Whitefield, Bangalore (Source: Company Website)

Lemon Tree Hotels Closes 28% Above IPO Price On Stock Market Debut

Lemon Tree Hotels Ltd. closed at a premium of 28 percent at Rs 71.65 apiece, on the National Stock Exchange over its IPO price on stock market debut. The stock traded between a low Rs 57.25 and a high of Rs 73.90.

The company’s Rs 1,040-crore initial public offer was subscribed 1.19 times on the final day of bidding. The qualified institutional buyers’ portion received strong demand and was subscribed 3.89 times the number of shares on offer, according to data shared by Axis Capital. The non-institutional investors’ portion and the retail investor segment was subscribed 0.12 times each.

Founded by Patanjali Govind Keswani in 2002, Lemon Tree operates under three brands associated with different hotel segments: the upper-mid-scale category called Lemon Tree Premier, mid-scale segment Lemon Tree Hotels, and economy hotels under Red Fox.

It's India’s largest hotel chain in the mid-priced segment, and the third-largest on the basis of its controlling interest in owned and leased rooms. It is the ninth-largest chain in terms of owned, leased and managed rooms.

Lemon Tree operated 4,697 rooms in 45 hotels (including managed hotels) across 28 cities in India, as of Jan 31. Of this, it owns 3,200 and manages 1,500. The company operates 10 upper mid-scale, 27 mid-scale, and eight economy hotels in its three brands.

The company directly owns some hotels and operates others through long-term leases for third-party owners. It also has operating and management agreements for some properties.