Kotak Mahindra Realty Fund on Wednesday, said that it will invest Rs 34 crore in Lemon Tree and Red Fox hotels.
Earlier this month, Lemon Tree network garnered investment of Rs 210 crore from the leading global private equity firm Warburg Pincus, which will be used to further expand the Lemon Tree network and enhance the company's pan-India presence.
"We welcome Kotak as a shareholder of the company and look forward to their contribution and support hour growth initiatives. We hope to benefit from the strength of the Kotak Group in the Indian and international financial markets," Lemon Tree Hotels CMD Patu Keswani said.
"We strongly believe in the need for mid-market and economy hotels in India. We believe that although Lemon Tree is a mid-market hotel brand operating in India, it has a strong international appeal," Kotak Realty Fund CEO S Sriniwasan said.
Kotak is also investing about Rs 2 crore in Red Fox Hotels, a new company also promoted by Patu Keswani, which proposes to set-up limited service, economy hotels across India at a price range of Rs 800 - Rs 2,000 per night. Warburg Pincus has also invested Rs 70 crores in Red Fox Hotels recently.
The first three Red Fox Hotels, aggregating 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.
The New-Delhi based Lemon Tree which designs, develops, owns and manages all its properties, has two operating hotels in Gurgaon and in 2006, will launch two more in Pune and Goa. Seven more hotels aggregating 1300 rooms are under development across India. On completion of all these ongoing projects in 2008, the company will have a strong presence across 10 major Indian cities, including Delhi, Mumbai, Hyderabad and Chennai.