Lemon Tree Hotels holds IPO


Lemon Tree Hotels held its ₹10 billion (US$159 million) IPO for 185 million equity shares allowing shareholders to sell a portion of their stake.

“The objective of the IPO was to achieve the benefits of listing the equity shares on the stock exchanges and for the sale of certain equity shares by the selling shareholders,” said Namita Das, a senior associate at AZB & Partners.

The offer for sale included 94 million equity shares by Maplewood Investments, 25 million equity shares by RJ CORP, 23 million equity shares by Five Star Hospitality Investment and 13 million equity shares by Ravi Kant Jaipuria and Sons.

The shares were subscribed 1.19 times at the close of the offering on 28 March. Kotak Mahindra Capital, CLSA India, JP Morgan and YES Securities were the global coordinators and book running lead managers for the offering.

AZB advised Maplewood Investments, the investment arm of private equity company Warburg Pincus. The firm negotiated the transaction documents, which included the offer agreement, the underwriting agreement, the cash escrow agreement and the syndicate agreement.

“These agreements were extensively negotiated to ensure that Maplewood as a selling shareholder provides only such undertakings/representations and has only such obligations under these agreements as are required under applicable laws,” said Das.

The firm’s work also involved amending the shareholder agreements and articles of association of the company, negotiating offer documents, and reviewing the certification provided by Maplewood to the lead managers. AZB partner Madhurima Mukherjee led the deal and was supported by Das and associate Shivam Sharan.

Shardul Amarchand Mangaldas & Co was legal counsel to Lemon Tree Hotels and Luthra & Luthra was legal counsel to the global coordinators and book running lead managers.

Lemon Tree Hotels is India’s largest hotel chain in the mid-priced hotel segment, according to a June 2017 Horwath Report.