The Lemon Tree Hotels stock rose in trade today after the hospitality firm said it has formed a joint venture (JV) with an arm of global private equity firm Warburg Pincus to develop rental housing projects envisaging investments of Rs 3,000 crore over a period of time.
The midcap stock opened with a gain of 12.14% at 77.15 level today against the previous close of 68.80 on the BSE.
The stock has been gaining for the last two days and has risen 8.78% in the period.
The stock has gained 4.42% during the last one month. The stock is trading above its 50 day and 200 day moving average of 70.07 and 73.31
On Thursday, shares of Lemon Tree Hotels closed on Rs 68.65, up 0.44 per cent from the previous close.
The JV, in which an affiliate of Warburg Pincus arm and Lemon Tree Hotels will hold 68 per cent and 30 per cent stake respectively, with the balance 2 per cent to be held by Lemon Tree Founder Chairman and MD Patanjali Keswani, plans to develop a platform that would provide affordable and conveniently located co-living spaces for students and young professionals, Lemon Tree Hotels said.
The JV partners will initially invest Rs 1,500 crore in equity over a period of time followed by an additional infusion of Rs 1,500 crore in equity at the option of the partners, it added.
The investment will be made to "develop rental housing projects through a combination of greenfield purpose-built properties, refurbishment of existing under-managed/stressed commercial and residential assets taken on lease/acquisition basis as well as management of existing for-rent accommodation projects," Lemon Tree Hotels said.
The JV marks company's entry into an adjacent but new business segment focusing on the development of institutional-grade rental housing accommodation serving both students and young working professionals across major educational clusters and key office markets in India, it added.
Meanwhile, the Sensex and Nifty opened higher today amid tepid gains in Asian markets tracking a rally on the Wall Street. While the Sensex rose 254 points to 36,062, Nifty gained 96 points to 10,876. YES Bank (1.76%), HDFC (1.41%) and ICICI Bank (1.24%) were the top Sensex gainers.
Edited by Aseem Thapliyal