Lemon Tree Hotels has announced a strategic reorganization involving Fleur Hotels, alongside a new investment from Warburg Pincus. Warburg Pincus will acquire APG’s 41.09% stake in Fleur and invest up to ₹960 crore to boost Fleur’s growth. This move separates hotel management from asset ownership, with Lemon Tree focusing on asset-light strategies and Fleur leading hotel acquisitions and development. The scheme is subject to regulatory approvals.
Strategic Business Restructuring
Lemon Tree Hotels is undergoing a strategic reorganization to streamline operations and unlock long-term shareholder value. This involves a Composite Scheme of Arrangement to clearly differentiate between hotel management and asset ownership. The announcement was made on January 9, 2026.
Warburg Pincus Investment
Warburg Pincus will acquire APG’s entire 41.09% stake in Fleur Hotels. They will also invest up to ₹960 crore of primary capital to support Fleur’s expansion. This marks a renewed partnership, building on Warburg Pincus’ initial investment in Lemon Tree in 2006.
New Business Model
The reorganization will result in Lemon Tree Hotels operating as a pure-play, asset-light hotel management and brand platform. Fleur Hotels will become a large-scale, growth-oriented hotel ownership platform with development capabilities. Lemon Tree’s hotel assets will be transferred to Fleur, which will manage all future hotel acquisitions and development.
Leadership Transition
Mr. Patanjali Govind Keswani, Founder of Lemon Tree Hotels, will become the Executive Chairman of Fleur Hotels. He will eventually transition to a Non-Executive role at Lemon Tree. The scheme will also result in a listing of Fleur’s shares on NSE and BSE. The entire process is expected to complete within 12 to 15 months.
Expected Outcomes
Post-restructuring, Fleur will expand its owned portfolio from 3,993 keys and 24 operating hotels to 5,813 keys across 41 hotels. Lemon Tree will continue to operate its existing leased hotels in Indore and Aurangabad, and will manage an additional 1,820 keys and 17 hotels transferred to Fleur. It will also continue to manage and franchise its existing portfolio of third-party owned hotels, with 6,011 keys across 89 operational hotels and 9,414 keys across 127 hotels.
Source: BSE
