Lemon Tree Hotels has announced a strategic restructuring plan designed to separate its asset-light management operations from its owned hotel properties, aiming to unlock higher valuations for its fee-based business model. The restructuring involves transferring owned and leased hotels, along with the development pipeline of under-construction and future properties, into Fleur Hotels.

Warburg Pincus Investment and Structure

The restructuring will be supported by a significant capital infusion from Warburg Pincus, which will invest up to ₹960.00 crore in primary equity into Fleur Hotels. This investment reintroduces Warburg Pincus to the capital structure, this time through Fleur, and is expected to de-risk future large-scale capital expenditure projects such as Aurika Nehru Place while ensuring a clear path to Fleur's eventual listing.

Operational Performance and Business Model

The company's asset-light management business demonstrates strong operational metrics, with the management segment earning EBITDA margins exceeding 70.00%, which typically warrants premium market multiples. Lemon Tree currently manages or franchises close to 120 hotels, with another 120-plus properties in the development pipeline. The fee income from this segment has shown steady growth with limited balance-sheet strain, and incremental growth requires minimal capital investment.

Analyst Perspectives and Valuation Outlook

Nuvama Institutional Equities currently views the restructuring as value-neutral, though they acknowledge the positive aspect of Warburg Pincus' return to the capital structure. According to their January 11 report, value creation will ultimately depend on the market assigning higher multiples to both the asset-light and asset-heavy segments, which represents a significant challenge given recent multiple corrections affecting the market leader.

JM Financial estimates that valuing Fleur at approximately 17.00 times and Lemon Tree at around 30.00 times FY27 estimated EBITDA implies a combined valuation of roughly ₹14,700.00 crore, translating into approximately 23.00% upside potential from value unlocking.

Implementation Timeline and Market Considerations

The restructuring and potential listing of Fleur is expected to take over a year to complete, requiring investors to price in benefits that will emerge gradually. Market observers note that any re-rating will depend on several factors including steady fee growth, disciplined capital deployment at Fleur, and supportive hotel sector cycle conditions. While Fleur will carry the operational burden as its room count increases, development timelines, occupancy ramp-ups, and broader hotel cycle dynamics will ultimately determine outcomes, with even modest delays potentially affecting valuation assumptions.

Lemon tree hotels Limited has announced a conference call with investors and analysts to discuss its Composite Scheme of Arrangement. The company filed a disclosure under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, informing stock exchanges about the scheduled investor meet.

Conference Call Details

The investor conference call is scheduled for Thursday, January 15, 2026, at 4:00 PM IST. The company's senior management team will represent LTHL during the call to discuss the announced Composite Scheme of Arrangement with participants.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 read with Part A of Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Company Secretary and Compliance Officer Pawan Kumar Kumawat signed the notification on January 12, 2026, addressing both the National Stock Exchange of India Limited and BSE Limited.

About Lemon Tree Hotels

Lemon Tree Hotels Limited operates as one of the largest hotel chains in India, managing properties through ownership, leasing, operations, and franchising models. The company serves multiple market segments from economy to upscale categories through its seven distinct brands:

• Aurika Hotels & Resorts
• Lemon Tree Premier
• Lemon Tree Hotels
• Red Fox Hotels by Lemon Tree Hotels
• Keys Prima by Lemon Tree Hotels
• Keys Select by Lemon Tree Hotels
• Keys Lite by Lemon Tree Hotels

Operational Footprint

The hotel chain currently operates 130 hotels across 80+ cities in India and internationally. The company maintains presence in major metropolitan areas including Delhi-NCR, Mumbai, Bengaluru, and Hyderabad, while also serving tier II and III cities such as Jaipur, Udaipur, Kochi, and Indore. International operations extend to Dubai, Bhutan, and Nepal.

The company has established a growing pipeline of 130 upcoming properties, bringing the total portfolio to 260 properties across operational and upcoming categories. Since opening its first 49-room hotel in 2004, the group has expanded significantly to become a recognized name in India's hospitality sector for both business and leisure travelers.