Lemon Tree Hotels announces major restructuring
Warburg Pincus to acquire 41% stake in Fleur Hotels
Lemon Tree Hotels announces major restructuring plan involving the merger and demerger of several group entities, as per a regulatory filing made on Friday. The proposal was cleared by the company’s board of directors at its meeting held on January 9, 2026.
As part of the restructuring, global private-equity major Warburg Pincus will acquire a 41.09 percent stake in Fleur Hotels Limited from APG. Warburg Pincus will also infuse Rs 960 crore into Fleur Hotels to support its future expansion plans.
The proposed reorganisation will result in the creation of two distinct platforms—Lemon Tree Hotels and Fleur Hotels. Under the scheme, Lemon Tree Hotels will focus on asset-light hotel management, branding and operations, while Fleur Hotels will house the hotel ownership and development business.
As part of the internal consolidation, two wholly owned subsidiaries—Carnation Hotels Private Limited and Hamstede Living Private Limited—will be merged into Lemon Tree Hotels Limited. Additionally, four other wholly owned subsidiaries will be merged into Fleur Hotels Limited.
Following this consolidation, Lemon Tree Hotels will demerge its hotel ownership and development business into Fleur Hotels. Post-demerger, Fleur Hotels is expected to be listed separately on the stock exchanges.
Shareholder impact
Under the demerger scheme, shareholders of Lemon Tree Hotels will receive equity shares of Fleur Hotels Limited. For every 311 shares held in Lemon Tree Hotels, shareholders will be entitled to 20 equity shares of Fleur Hotels.
The company clarified that the restructuring will not alter the existing shareholding pattern of Lemon Tree Hotels. The parent company will continue to hold a significant stake in Fleur Hotels even after the demerger.
Q2 FY26 financial highlights
For the second quarter of FY26, Lemon Tree Hotels reported total income of Rs 308 crore, compared with Rs 317.41 crore in Q1 FY26, reflecting a quarter-on-quarter decline of around 3 percent. On a year-on-year basis, income grew 8.1 percent from Rs 284.84 crore.
Total expenses during the quarter stood at Rs 252.17 crore, marginally lower than Rs 254.15 crore in the previous quarter, while rising 5.2 percent year-on-year from Rs 239.73 crore.
Net profit for Q2 FY26 came in at Rs 41.93 crore, down 12.8 percent sequentially from Rs 48.10 crore in Q1 FY26. However, profit after tax rose 19.7 percent compared with Rs 35.04 crore reported in the corresponding quarter last year.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
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