Lemon Tree Hotels is India’s largest hotel chain in the mid-priced hotel segment, as on June 30, 2017, according to the Horwath Report. It opened its first hotel with 49 rooms in May 2004. It offered a total of 4,697 rooms across 45 hotels (including managed hotels) across 28 cities in India as on January 31, 2018. Lemon Tree Hotels caters to middle class guests and delivers differentiated yet superior service offerings, with a value-for-money proposition.
Lemon Tree Hotels’ vision is to be India’s largest and most preferred chain of hotels and resorts in each of the upper-midscale, midscale and economy hotel segments. Owing to the dynamic and evolving nature of Indian guests’ expectations and based on their market research, the company has created three brands in order to address these three hotel segments:
- Lemon Tree Premier: Targeted at the upper-midscale hotel segment catering to business and leisure guests who seek to use hotels at strategic locations and are willing to pay for premium service and hotel properties.
- Lemon Tree Hotels: Targeted at the midscale hotel segment catering to business and leisure guests. These hotels offer a comfortable, cost-effective and convenient experience.
- Red Fox by Lemon Tree Hotels: Targeted at the economy segment customers.
The company’s revenue from operations stood at Rs. 4,119.34 million for the FY2017, and it clocked a CAGR of 17.68% between FY2013 and FY2017.
- Rs. 1001.59 crore to Rs. 1038.68 crore; Issue of 18,54,79,400 equity shares,
Fresh Issue – Nil, Offer for Sale – 18,54,79,400 equity shares - 265 equity shares and in multiples thereafter
- QIBs - 50% NIBs - 15% Retail investors – 35%
- Rs. 10
- ASBA mandatory (No cheques will be accepted)
- Proposed to be listed on BSE and NSE
- Kotak Mahindra Capital Company Ltd, CLSA India Private Ltd, J.P. Morgan India Private Ltd, YES Securities (India) Ltd.
- Karvy Computershare Private Limited
- Leading mid-priced hotel chain with a differentiated business model
- Strategically positioned in key geographies
- Present across the value chain: development and ownership; hotel operations and sales
& marketing - Focus on brand excellence, providing a value-for money proposition and strengthening employee culture
- Experienced promoter and management team
The offer comprises of an offer for sale.
The offer aims to:
I. Achieve the benefit of listing the equity shares on the stock exchanges.
II. 1. Achieve a sale of 18,54,79,400 equity shares by the selling shareholder.
Lemon Tree Hotels Limited will not receive any proceeds from the offer and all the proceeds shall go to the selling shareholder.
An initial public offering (IPO)/public issue is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves the way for listing and trading of the issuer’s securities.
The shares are initially issued in the primary market at an offering price determined by the lead manager(s)/the merchant banker(s) to the IPO.
The primary market consists of a syndicate of investment banks and broker dealers that the lead managers assemble and that allocate shares to institutional, high net worth individuals (HNI) and individual/retail investors.
As far as IPOs are concerned, a price band is a value-setting method whereby a seller indicates an upper and lower cost range, between which the buyers/investors are able to place their bids. The price band's floor and cap provide guidance to the buyers.
It is up to the company to decide on the IPO price or the price band, in consultation with the lead managers.
The basis of IPO price is disclosed in the offer document. The issuer is required to disclose in detail about the qualitative and quantitative factors justifying the IPO price.
The IPO price is normally based on such factors as the company’s financials, products and services, income stream as well as the demand for the shares and current market conditions.
The lead managers must determine a fair offering price, which takes into consideration the need for the company to raise capital while offering the new issue at a price which represents a fair value of the shares.
A Red Herring Prospectus (RHP) is a document submitted by a company (issuer) as part of a public offering or an IPO of securities (either stocks or bonds).
A retail individual investor means an investor who applies or bids for securities of or for a value of not more than Rs 2,00,000.
Yes. He can bid in a book-built IPO for a value not more than Rs 2,00,000. Any bid made in excess of this will be considered in the HNI category.
Yes. Investors can change or revise the quantity or price in the bid using the form for changing/revising the bid that is available along with the application form. However, the entire process of changing or revising the bids shall be completed before the IPO closes.
In case of fixed price issues, investors are intimated about the CAN/Refund order within 10 days of the closure of the IPO.
In case of book built IPOs, the basis of allotment is finalised by the book-running lead managers within two weeks from the closure of the issue. The registrar then ensures that the demat credit or refund as applicable is completed within 6 working days of the closure of the issue.
In the case of book-built issues, the exchanges (Bombay Stock Exchange/National Stock Exchange) display the data regarding the bids obtained (on a consolidated basis between both these exchanges).
The data regarding the bids is also available category-wise.
Investors are entitled to receive a Confirmatory Allotment Note (CAN) in case they have been allotted shares within 6 working days from the closure of a book Built issue. The registrar has to ensure that the demat credit or refund as applicable is completed within 6 working days of the closure of the book-built issue.
The lead managers also publish an advertisement at least in an English national daily with wide circulation, one Hindi national paper and a regional language daily circulated at the place where registered office of the issuer company is situated.
The listing on the stock exchanges is done within seven days from the finalisation of the issue.
Ideally, it would be around three weeks after the closure of the book-built issue.
In case of fixed price issue, it would be around 10 days after closure of the issue.