The Lemon Tree Hotels IPO was subscribed 25% on the first day of three-day bidding on Monday. The Rs 1,038-crore crore IPO received bids for 3,26,06,395 shares against the total issue size of 12,98,35,580 shares, NSE data showed. The portion for Qualified Institutional Buyers (QIBs) portion was subscribed 82 per cent, non institutional investors - 3 per cent and retail investors - 2 per cent.
The IPO was launched in a holiday-truncated week (Thursday and Friday) marked by March derivatives expiry on Wednesday.
On Sunday, the hospitality chain raised Rs 311 crore from anchor investors.
18 anchor investors invested Rs 311.61 crore at a price of Rs 56 per scrip after allotment of 5,56,43,820 shares, the firm said.
SBI Magnum Balanced Fund, DB International Asia, HDFC Small Cap Fund, Aberdeen Asian Smaller Companies Investment Trust Plc, BNP Paribas Arbitrage and Alpine Global Premier Properties Fund are among the anchor investors.
The price band for the initial public offer (IPO), which will close on March 28, has been fixed at Rs 54-56 per equity share.
At the upper end of the price band, the issue will raise Rs 1,038.68 crore.
The hotel chain, which is backed by buyout firm Warburg Pincus and Dutch pension fund APG, has fixed the IPO price band at Rs 54-Rs 56 per share. The issue will close on March 28.
The firm's public offer comprises sale of up to 185,479,400 equity shares by the existing shareholders, including Maplewood, Whispering Resorts, Palms International and RJ Corp.
According to the draft red herring prospectus, promoters hold 31.11 per cent stake and private equity investors and other non-promoter share holders hold 68.89 per cent stake in the firm.
"Our company expects listing of the equity shares will enhance our visibility and brand image and provide liquidity to our shareholders. Listing will also provide a public market for the equity shares in India," the company said in draft red herring prospectus (DRHP).
Lemon Tree, currently the leader in terms of controlling interest in owned and leased rooms has operations spread across the value chain and range from acquiring land to owning, leasing, developing, managing and marketing hotels.
The company has 45 hotels with 4,700 rooms in 28 cities. It has a portfolio of 19 owned-hotels, three owned-hotels are located on leased or licensed land, five leased hotels and 18 managed hotels, a company statement said.
Founded in 2002 by Patu Keswani, the company has hotels under three brands - Lemon Tree Premier, which is an upscale brand; Lemon Tree Resorts, a leisure segment brand; Lemon Tree Hotels, a midscale brand and the economy brand Red Fox Hotels.
Kotak Mahindra Capital Company, CLSA India, JP Morgan India and Yes Securities will manage the company's public issue. The equity shares are proposed to be listed on the BSE and the National Stock Exchange.