Lemon Tree Hotels shares came into focus following the company's denial of media reports suggesting Warburg Pincus may acquire a meaningful stake in the mid-range hotel chain. The reports, which surfaced during market hours on January 7, triggered a 5% surge in the stock price before the company issued its clarification.

Company Issues Clarification on Warburg Pincus Reports

Lemon Tree Hotels has categorically denied the existence of any negotiations or agreements with Warburg Pincus. The company stated that no negotiations, discussions, agreements, or proposals—whether ongoing or approved—are currently in place. Additionally, no preferential allotment of shares to Warburg Pincus is under consideration.

The company emphasized that while it periodically evaluates various strategic and financial options in the ordinary course of business, any such discussions remain preliminary and non-binding until requisite approvals are obtained and definitive agreements are executed.

Media Reports on Potential Transaction Structure

According to CNBC-TV18 reports, Warburg Pincus was likely to acquire APG Strategic RE Pool's stake in Lemon Tree Hotels in the first tranche. APG Strategic RE Pool currently holds a 14.99% stake in the hospitality company. The potential deal was reported to possibly trigger an open offer, though these claims have now been denied by the company.

New Hotel Operation Agreement in Tirupati

On December 29, 2025, Lemon Tree Hotels announced the execution of a Hotel Operation Agreement for an upcoming property in Tirupati, Andhra Pradesh. The hotel will be operated by Carnation Hotels Private Limited, a wholly owned subsidiary, under the "Lemon Tree Suites" brand.

The Tirupati location represents a strategic choice, positioned in a major pilgrimage center known for the Sri Venkateswara Temple. The hotel will offer comprehensive facilities including dining, event spaces, and recreational amenities.

Company Portfolio and Stock Performance

Lemon Tree Hotels operates an extensive network of more than 110 properties across over 75 cities. The company maintains an international presence in Dubai, Bhutan, and Nepal, demonstrating its regional expansion strategy.

Regarding stock performance, Lemon Tree shares experienced a muted year in 2025, gaining just 4% during the period. The stock price has declined 4% in 2026, reflecting mixed market sentiment toward the hospitality sector.

Lemon Tree Hotels has categorically denied media reports suggesting that private equity giant Warburg Pincus is in negotiations to acquire a stake in the hospitality chain. In an official clarification filed with stock exchanges, the company termed the reports as "factually incorrect and misleading," contradicting earlier market speculation that had driven shares up over 4%.

Company's Official Clarification

In response to exchange queries about the media reports, Lemon Tree Hotels submitted a comprehensive clarification stating that no negotiations, discussions, agreements, or proposals are ongoing with Warburg Pincus. The company specifically addressed claims about stake acquisition from APG Strategic RE Pool and potential preferential allotments.

Strategic Evaluations in Ordinary Course

While denying specific acquisition talks with Warburg Pincus, the company acknowledged that it regularly evaluates strategic and financial options in the ordinary course of business, including investments related to its subsidiaries. However, the company emphasized that all such discussions are provisional unless followed by proper approvals and definitive documentation.

Regulatory Compliance Statement

Lemon Tree Hotels confirmed its compliance with disclosure requirements under Regulation 30 of SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. The company stated that no material information requiring mandatory disclosure has been withheld from stock exchanges that could explain recent trading movements.

Expected Impact Assessment

The company clarified that since the media reports do not relate to any confirmed or approved transaction and contain factually incorrect statements, they do not reflect the actual status of any company proposal or decision. Consequently, Lemon Tree Hotels does not expect the media reports to have any material impact on its operations, financial position, or business prospects.

Market Context

The clarification comes after shares had surged over 4% following reports of a potential two-tranche deal structure involving Warburg Pincus. The reported transaction was said to include acquisition of APG Strategic RE Pool's 14.99% stake and a preferential allotment, which would have triggered an open offer under regulatory requirements. The company has committed to making appropriate disclosures if any material developments occur in the future.