Warburg Pincus set to make partial exit from Lemon Tree

MUMBAI: Buyout firm Warburg Pincus is set to make a partial exit from its almost 12-year-old investment in Lemon Tree Hotels Ltd, as the company prepares to launch its initial public offering (IPO) at the end of this month.

On Monday, Lemon Tree Hotels said that it will launch its ₹1,039 crore IPO on March 26. The hotel operator has set a price band of ₹54-56 per share for the IPO. At the upper end of the price band, the share sale values the company at ₹4,403 crore. The offer will close on March 28. The public offering is a pure offer for sale.

Warburg Pincus, which had invested approximately ₹300 crore in 2006 for a 24% stake in the company, is selling a 12% stake in the company through the IPO. At the upper end of the price band, Warburg will garner ₹529 crore (approx $81.2 million) from the share sale.

Warburg recently sold its investment in logistics company Continental Warehousing Corp. (Nhava Seva) Ltd. On Monday, Hindustan Infralog, a joint venture between Dubai-based port operator DP World and the National Investment and Infrastructure Fund, announced that it is acquiring 90% stake in Continental Warehousing. Warburg Pincus held a 40% stake in the company. Warburg had invested in the logistics operator in 2011. The American private equity firm is also looking to make a part exit from its investment in jewellery retail chain Kalyan Jewellers India Ltd. In February, Mint reported that Kalyan Jewellers is planning to file the draft papers for its proposed ₹2,500 crore IPO in March. Last year, Warburg sold shares worth ₹530 crore in a part exit from AU Small Finance Bank Ltd, through the bank’s IPO. Other investors that are selling shares in the Lemon Tree IPO include Delhi-based billionaire Ravi Jaipuria and his firm RJ Corp. Jaipuria and his company are selling shares worth ₹220 crore.