Mumbai: The Rs1,039 crore IPO of Warburg Pincus-backed Lemon Tree Hotels Ltd witnessed an overall subscription of 44% on Tuesday, the second day of the share sale.

As of 5pm, on the institutional front, the IPO saw a subscription of 1.43 times, or 143%, while portions reserved for retail investors and HNIs were subscribed 4% and 5%, respectively.

The hotel chain operator has set a price band of Rs54-56 per share for the IPO. At the upper end of the price band, the share sale values Lemon Tree at Rs4,403 crore. The offer will close on 28 March.

The Lemon Tree IPO is a pure secondary offering that will see the private equity firm Warburg Pincus and other existing shareholders sell a total of 185.48 million shares.

Warburg Pincus, which invested approximately Rs300 crore in 2006 for a 24% stake in the company, is selling a 12% stake through the Lemon Tree IPO. At the upper end of the price band, Warburg will garner Rs529 crore (approximately $81.2 million) from the share sale.

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 Rs220 crore.

Founded by Patanjali Govind Keswani in 2002, Lemon Tree operates under three brands that cater to the needs of different hotel segments: Lemon Tree Premier is targeted primarily at the upper-midscale hotel segment; Lemon Tree Hotels is targeted at the midscale segment; and Red Fox by Lemon Tree Hotels is targeted at the economy segment.

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