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Lemon Tree Hotels Limited IPO Review (Price, DRHP)

Lemon Tree Hotels Limited IPO Review

Lemon Tree Hotels Limited (LTHL) is incorporated in 1992. This company is India’s largest chain in the mid-priced hotel’s sector and third largest overall. LTHL is coming up to be listed on the stock exchanges through their first even initial public offering in the primary markets. So let us consider the issue details and issue price for Lemon Tree IPO and post our Lemon Tree Hotels Limited IPO Review here.

About Lemon Tree Hotels Limited IPO :

  • IPO Opens on – March 26, 2018.
  • IPO Closes on – March 28, 2018.
  • Face Value – Rs. 10 Per Equity Share.
  • Issue Price – Rs. 54 – Rs. 56 Per Equity Share.
  • Issue Type – Fixed Price Issue IPO.
  • Retail Allocation – 35%
  • Market Lot – 265 Shares.
  • Minimum Order Quantity – 265 Shares.
  • Issue Size – 185,479,400 Equity Shares of Rs 10 aggregating up to Rs 1,038.68 Cr.
  • Listing Exchange – BSE, NSE.
  • Draft Prospectus – Download.

Objectives of the issue:

  • Achieve the benefits of listing the Equity Shares on the Stock Exchanges.
  • Sale of up to 195,797,000 Equity Shares by the selling shareholders.

About The Company –

  • Lemon Tree Hotels Limited is a Delhi based company.
  • This company operates in the mid-priced hotel sector and its hotels are located across India, in metro regions, including the NCR, Bengaluru, Hyderabad and Chennai,also tier I and tier II cities such as Pune, Ahmedabad, Chandigarh, Jaipur, Indore and Aurangabad.
  • Lemon Tree Hotels Limited is operated 4,697 rooms in 45 hotels (including managed hotels) across 28 cities in India.
  • This company winning award Indian hotel chain opened its first hotel with 49 rooms.
  • Lemon Tree Hotels Limited have provide a portfolio of 19 owned hotels, three owned hotels located on leased or licensed land, five leased hotels and 13 managed hotels.
  • This company also has project design, management and development capabilities through its Subsidiary, Grey Fox Project Management Company Private Limited (“Grey Fox”).
  • Lemon Tree Hotels Limited has employed 3,070 personnel as of July 31, 2017 across its owned and leased or licensed properties.
Lemon Tree Hotels Limited
Lemon Tree Hotels Limited

Promoters of the company :

  • Mr. Patanjali Govind Keswani, aged 58 years, is the Promoter, Chairman and Managing Director of this company.
  • Spank Management Services Private Limited (SMSPL) is the Promoter of this company.

Company Financials:

Lemon Tree Hotels Limited IPO

Lemon Tree Hotels Limited IPO Review:

As we checked in the draft red herring prospectus, we found that the company has made a loss on the financial year 2013. Then there was net profit on the financial year 2014. Then again two consecutive loss-making years on the FY 2015 and FY 2016. Wiping off all the losses the company is again back into profit on the FY 2017. So the main disadvantage of this issue is irregular financial data. The current earnings per share as per the last FY is at 0.04 and the PE ratio is 1400. Considering the available data it seems that the issue price of Rs. 54 – Rs. 56 per equity share is on the higher side. Our Lemon Tree Hotels Limited IPO Review has a NEUTRAL view on this issue and we suggest cash-rich investors invest at their own risk.

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