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Lemon Tree Hotels has unveiled a major strategic overhaul aimed at sharpening its business focus and accelerating long-term value creation, alongside a significant investment by global private equity firm Warburg Pincus into Fleur Hotels.
The boards of Lemon Tree Hotels Limited and its subsidiary Fleur Hotels Limited have approved a Composite Scheme of Arrangement that will simplify the group’s structure and split it into two distinct, high-growth platforms—one focused on hotel management and branding, and the other on hotel ownership and development. The proposal is subject to regulatory and shareholder approvals.
Under the plan, Lemon Tree will emerge as a pure-play, asset-light hospitality company, concentrating on hotel management, franchising, brand development and digital capabilities. Fleur, meanwhile, will become the group’s dedicated asset ownership and development vehicle, housing current and future hotel assets and leading all acquisitions and new builds.
In parallel, Warburg Pincus, through its affiliate Coastal Cedar Investment B.V., will acquire APG Strategic Real Estate Pool N.V.’s entire 41.09% stake in Fleur Hotels. Warburg Pincus has also committed to invest up to ₹960 crore of fresh primary capital into Fleur in phases, strengthening its balance sheet and supporting its expansion plans.
The transaction marks a renewed partnership between Lemon Tree and Warburg Pincus, which was an early investor in the company in 2006 and played a key role in its formative growth years.
As part of the reorganization, hotel assets currently owned by Lemon Tree will be transferred to Fleur, consolidating all ownership and development activities under one platform. Lemon Tree will transition fully to an asset-light model, while Fleur will act as the group’s exclusive owner and developer of hotel properties. Fleur’s shares are also proposed to be listed on the NSE and BSE following the completion of the scheme.
Founder Patanjali Govind Keswani will serve as Executive Chairman of Fleur Hotels and, over time, transition to a non-executive role at Lemon Tree Hotels.
The move comes against the backdrop of strong tailwinds for India’s hospitality sector, including rising domestic travel, a rebound in international tourism, infrastructure investments and growing demand from corporate travel and MICE activities.
Commenting on the announcement, Mr. Keswani said the reorganization is designed to create a “simpler, more transparent and growth-oriented structure” for both companies. He added that renewing the partnership with Warburg Pincus is a defining step as Fleur enters its next phase of expansion, supported by global expertise and a shared focus on digital innovation and sustainability.
Warburg Pincus Managing Director Anish Saraf said the firm is pleased to back Fleur’s next chapter, highlighting Lemon Tree’s pioneering role in India’s mid-market hospitality segment and the strong industry fundamentals supporting future growth.
APG, which has been invested in Fleur for over a decade, described the transaction as the successful culmination of a long-term investment strategy, delivering full-cycle returns while supporting the creation of one of India’s leading hospitality platforms.
Following implementation of the scheme, Fleur is expected to become one of the largest owners of hotel assets in India, with its owned portfolio expanding to over 5,800 keys across 41 hotels. Lemon Tree will continue to operate and manage these hotels while scaling its third-party management and franchise portfolio in India and overseas.
The listing of Fleur Hotels as a separate entity is expected to be completed within 12 to 15 months after receipt of all necessary approvals. Morgan Stanley is acting as the exclusive financial advisor to the transaction.
