Lemon Tree’s shake-up aims to unlock asset-light re-rating

Lemon Tree Hotels Ltd is redrawing its corporate map with the proposed restructuring, separating hotel ownership from management.

- Manvi Agarwal [e-mail]

It makes the listed entity an asset-light management and franchise platform.Owned and leased hotels, as well as under-construction and future hotels, will be integrated into Fleur Hotels, which will get a primary equity infusion of up to ₹960 crore from Warburg Pincus. Lemon Tree wants investors to value its management business for its fee income and margins, rather than the debt and depreciation that accompany hotel ownership.