| Market Cap | ₹8,301 CrMid Cap |
|---|---|
| Revenue TTM | ₹1,473 CrOperating |
| Net Profit TTM | ₹234.8 CrProfitability |
| RSI | 37.37Neutral Zone |
Key highlights
- RJ Corp will acquire a 49% stake in Arum Hotels by subscribing to 47,65,394 fresh equity shares at Rs. 10 each
- Carnation Hotels will retain a 51% majority stake in the joint venture entity
- The partnership is specifically established for the execution of the upscale Aurika Shillong hospitality project
- Arum Hotels transitions from a wholly owned subsidiary to a step-down subsidiary of Lemon Tree Hotels
- The agreement mandates an equal number of director nominations from both parties on the board of Arum Hotels
What Is the Partnership?
Carnation Hotels Private Limited, a wholly owned subsidiary of Lemon Tree Hotels, has entered into a Joint Venture Agreement with RJ Corp Limited. The collaboration focuses on Arum Hotels Private Limited, the Special Purpose Vehicle responsible for the development of the Aurika Shillong project. Under the terms of the agreement, RJ Corp will subscribe to 4,765,394 fresh equity shares of Arum at a face value of Rs.
10 per share. This transaction results in RJ Corp holding a 49% stake, while Carnation retains 51% ownership. Consequently, Arum ceases to be a wholly owned step-down subsidiary and will operate as a step-down joint venture subsidiary.
Partner Profile
RJ Corp is a prominent Indian multi-business conglomerate with extensive interests in beverages, fast-food retail, healthcare, and education. It is recognized as a leading global bottling partner for PepsiCo through Varun Beverages and a major franchisee for Yum! Brands via Devyani International, managing brands like KFC, Pizza Hut, and Costa Coffee.
The group also operates the Cream Bell dairy brand. By partnering with RJ Corp, Lemon Tree Hotels leverages a partner with significant experience in managing capital-intensive consumer businesses and large-scale infrastructure across the Indian market.
What It Unlocks
- Facilitates the development of the Aurika Shillong project under Lemon Tree's upscale brand segment
- Distributes capital expenditure and operational risks through a joint venture model with an experienced conglomerate
- Ensures balanced governance through equal director representation on the board of the SPV
- Secures long-term alignment by restricting share transfers to third parties except for affiliate groups
- Supports the company's expansion strategy into premium tourism destinations in Northeast India
Financial and Industry Context
Lemon Tree Hotels currently maintains a TTM price-to-earnings ratio of 35.35, which compares to a sector average of 43.16 and an industry PE of 40.38. The company reported annual revenue growth of 11.83% and a net profit increase of 15.52% in the last fiscal year. The Aurika Shillong project is part of the company's efforts to scale its upscale portfolio.
Prior to this capital infusion, the SPV Arum Hotels had a net worth of approximately negative Rs. 12.97 lakhs. This partnership allows Lemon Tree to maintain control while injecting fresh equity to fund project execution without direct consolidation of the full capital burden.
| Share price | ₹104.78 |
|---|---|
| Market capitalisation | ₹8,301.16 Cr |
| Revenue (annual) | ₹1,444.50 Cr |
| Net profit (annual) | ₹227.10 Cr |
| Revenue (latest quarter) | ₹344.61 Cr-17.24% vs previous quarter |
| Net profit (latest quarter) | ₹46.03 Cr-49.69% vs previous quarter |
| P/E (TTM) | 35.35×Sector 43.16× |
| Promoter holding | 22.32%0.00% QoQ |
| FII holding | 19.44%Current quarter |
Reference market data from a third-party provider, as of the story. Not a valuation or a recommendation.
Exchange filing by Lemon Tree Hotels Limited announcing the execution of a Joint Venture Agreement for the Aurika Shillong project. Market figures from a third-party data provider.
