Warburg Pincus invests Rs280 crore in two Indian hotel companies
02 August 2006
Chennai: Private equity investment firm Warburg Pincus has invested Rs280 crore in two Indian hotel chains. The company has invested Rs210 crore in Lemon Tree Hotels and Rs70 crore in Red Fox Hotels. The investment will be used to expand the hotel chain. The investment firm has acquired significant portion of the shares from the hotel employees.
The Lemon Tree chain operates in the mid price segment (Rs3,000-5,000) per room night caters to the business and leisure travelers. On the other hand the Red Fox is a limited service budget hotel chain charing Rs800-2,000 per room night.
The fresh investment will be used to expand the Lemon Tree and Red Fox chain of hotels. Presently there are two Lemon Tree hotels in Gurgaon and two more will be opened in Pune and Goa this year. In addition seven more hotels with a total room capacity of 1,300 are under development. When completed Lemon Tree Hotel chain will have properties in Delhi, Mumbai, Hyderabad and Chennai.
The first three Red Fox Hotels, aggregating to 500 rooms and targeted at the extremely price conscious business and leisure traveler looking for a no-frills product which is clean, comfortable and safe are under development and are expected to open in Mumbai, Jaipur and Hyderabad by late 2008.