Shares of Lemon Tree Hotels jumped 12 per cent in Friday’s trade after India’s largest chain in the mid-price hotel segment formed a joint venture (JV) with an affiliate of Warburg Pincus.
The JV marks Lemon Tree Hotel’s entry into a new business segment focusing on the development of institutional-grade rental housingNSE 0.59 % accommodation. The company made the announcement post market hours of Thursday.
Following the announcement, the stock rose 12.13 per cent to hit a high of Rs 77.15 on BSE.
The affiliate of Warburg Pincus and Lemon Tree Hotels will hold 68 per cent and 30 per cent stake, respectively in the JV, with the balance 2 per cent to be held by Lemon Tree promoter Patanjali Keswani.
The JV partners will initially invest Rs 1,500 crore in equity over a period of time followed by an additional infusion of Rs 1,500 Crore in equity at the option of the partners to develop rental housing projects.