Lemon Tree Hotels has announced a comprehensive composite reorganisation that will fundamentally restructure the hospitality group's operations and ownership structure. The strategic move involves splitting the company into two distinct platforms designed to optimise operational efficiency and growth potential.

Restructuring Details and Investment

The reorganisation creates two separate entities with distinct operational focuses:

Warburg Pincus has acquired APG's entire 41% stake in Fleur Hotels and committed up to ₹960 crore of primary equity funding to support the growth initiatives of the asset-heavy platform. This transaction provides APG with a complete exit from their investment while bringing in a new strategic investor.

Financial Impact and Operational Changes

The restructuring will result in several significant changes to Lemon Tree Hotels' financial profile:

• Revenue Structure: Reported revenues will decrease following asset transfers to Fleur Hotels
• Fee Income: The proportion of management fees will increase significantly
• Profitability: EBITDA margins are expected to expand
• Cost Structure: Both depreciation and interest costs will decline
• Ownership: Lemon Tree Hotels' shareholding structure remains unchanged

Market Listing and Valuation Impact

Fleur Hotels is expected to be listed on the stock exchanges within 12-15 months of the transaction completion. However, analysts have expressed concerns about the value creation potential for existing Lemon Tree shareholders.

Analyst Assessment

While the restructuring successfully creates separate platforms and facilitates APG's exit, analysts believe it does not generate material value for Lemon Tree's existing shareholders. Post-completion of the deal and Fleur's listing, Lemon Tree is expected to trade at a holding company discount for its stake in Fleur Hotels.

The valuation has been conducted using Sum of the Parts (SoTP) methodology, factoring in the current restructuring plans. This comprehensive analysis has led to a downward revision of the target price to ₹157 from the previous target of ₹210, along with a rating change from Buy to Accumulate.

Lemon Tree Hotels Limited conducted an investor conference call on January 15, 2026, to discuss its announced Composite Scheme of Arrangement with analysts and institutional investors. The company has formally disclosed this development to the stock exchanges under regulatory compliance requirements.

Regulatory Disclosure Details

The company filed the disclosure pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The communication was addressed to both the National Stock Exchange of India Limited and BSE Limited, covering the outcome of the conference call held with market participants.

Accessibility and Transparency

Lemon Tree Hotels has ensured transparency by making the audio recording of the conference call publicly available. The recording has been uploaded to the company's official website, allowing stakeholders to access the complete discussion regarding the Composite Scheme of Arrangement.

The audio file can be accessed through the company's website under the policies section, demonstrating the company's commitment to maintaining open communication with its investor community.

Corporate Communication

The disclosure was signed by Pawan Kumar Kumawat, Company Secretary and Compliance Officer, bearing membership number A25377. The communication maintains the company's standard protocol for regulatory filings and investor relations activities.

This conference call represents part of Lemon Tree Hotels' ongoing communication strategy with the investment community regarding significant corporate developments and structural arrangements.