Lemon Tree Hotels Limited and Fleur Hotels Limited have approved a Composite Scheme of Arrangement intended to reorganize the group structure and establish two distinct operating platforms. The announcement outlines a strategic reorganization alongside a new investment by Warburg Pincus into Fleur Hotels Limited, subject to regulatory and shareholder approvals.
Under the proposed scheme, Lemon Tree and Fleur will operate as separate but complementary entities. Lemon Tree will function as a pure-play, asset-light hotel management and brand platform, while Fleur will become a hotel ownership and development company with a growth-focused portfolio and pipeline. Fleur is currently a subsidiary of Lemon Tree.
As part of the approved actions, Coastal Cedar Investment B.V., an affiliate of Warburg Pincus, will acquire the entire 41.09% equity stake held by APG Strategic Real Estate Pool N.V. in Fleur. Warburg Pincus has also committed to invest up to INR 960 crore or around $106 million USD of primary capital into Fleur in tranches to support its future growth. This transaction renews Warburg Pincus’ relationship with Lemon Tree following its initial investment in 2006.
The scheme will be implemented through a process approved by the National Company Law Tribunal. Lemon Tree’s existing hotel assets will be transferred to Fleur, which will become the group’s exclusive asset ownership and development entity. Fleur will also lead all future hotel acquisitions and developments. Lemon Tree will transition fully to an asset-light model focused on hotel management, franchising and digital operations. Fleur’s shares are expected to be listed on the NSE and BSE following completion of the process. Patanjali Govind Keswani will serve as executive chairman of Fleur and will later move to a non-executive role at Lemon Tree.
“This scheme is intended to create a simplified, transparent, and growth-oriented structure for both companies, which we believe will enhance long-term value for our shareholders. We are also pleased to renew our partnership with Warburg Pincus, with whom we share a long history of building the foundations of Lemon Tree. This collaboration marks a defining moment as we enter the next phase of expansion for Fleur. With the Indian hospitality industry at an important inflection point, we look forward to leveraging Warburg Pincus’ global network and deep real estate and hospitality experience to scale responsibly, advance digital-led capabilities and embed sustainability as a core pillar of Lemon Tree’s and Fleur’s long-term growth journey,” said Mr. Patanjali Govind Keswani, founder and executive chairman of Lemon Tree and Fleur Hotels.
“We are pleased to once again partner with Patu and the Fleur leadership team to support the next chapter of growth for the platform. Lemon Tree has played a pioneering role in shaping India’s mid-market hospitality segment, building a large scale, high-quality portfolio with strong brands and operating capabilities. With favourable industry fundamentals and a clear strategic roadmap, we look forward to supporting the team as they continue to scale the business,” said Anish Saraf, managing director, Warburg Pincus.
“As we continue our long-standing association with Lemon Tree, we are also proud to have supported Fleur Hotels for more than a decade to become one of India’s leading and socially inclusive hospitality platforms. This transaction in Fleur is the culmination of APG’s long-term approach to investing and provides our clients with a full-cycle return from one of the fastest growing economies in the world. We thank Patu and the Fleur team for their hard work and commitment to reach this milestone as the company enters its next phase of growth,” said Dominic Doran, senior director, Real Estate, Asia-Pacific, APG Asset Management.
The scheme has an appointed date of April 1, 2026. Following completion, Fleur will expand its owned portfolio from 24 operating hotels with 3,993 keys to 41 hotels with 5,813 keys. Lemon Tree will continue managing leased and third-party hotels while focusing on its asset-light strategy. Morgan Stanley acted as exclusive financial advisor on the proposed transaction.