Overview
Schloss Bangalore Limited, the parent company of The Leela Palaces, Hotels & Resorts, has initiated a 5,000 crore Initial Public Offering (IPO), marking a pivotal moment in India's luxury hospitality industry. The IPO comprises a fresh issue of 3,000 crore and an Offer for Sale (OFS) of 2,000 crore by promoter Project Ballet Bangalore Holdings (DIFC), an affiliate of Brookfield Asset Management.
IPO Details:
- • IPO Size: 75,000 crore
- • Fresh lssue: 3,000 crore
- • Offer for Sale (OFS): 2,000 crore
- • Price Band: 7413 to 435 per share
- • Lot Size: 34 shares
- • Subscription Period: May 26 to May 28, 2025
- • Anchor Investors: Raised 1,575 crore from 47 investors, including Goldman Sachs and Fidelity
- • Grey Market Premium (GMP): Approximately 2.5% as of Day 2
Company Background
Founded in 1986 by the late Captain C.P. as a premier luxury hotel brand in India. However, financial challenges led to its acquisition by Brookfield Asset Management in company has undergone significant restructuring and expansion.
Current Operations
• Portfolio: 12 operational hotels across 10 cities
• Room Inventory: 3,382 keys
• Formats: The Leela Palaces, The Leela Hotels, and The Leela Resorts
• Ownership Structure:
• 5 owned hotels
• 6 managed through hotel management agreements
• 1 operated under a franchise arrangement
Financial Performance
The company's financial health has improved notably:
• Debt Reduction: Consolidated debt reduced to 2,568 crore as of March 2025, a 32% decrease
• Profitability: Turned profitable in the last fiscal year, with an 11% increase in revenue
• RevPAR Growth: Revenue per available room rose nearly 23% year-on-year to 79,592 in FY24
Expansion Plans
The Leela aims to diversify and expand its footprint:
• New Properties: Plans to add eight hotels by 2028, increasing room capacity by approximately 24.63% Target
• Locations: Agra, Srinagar, Sikkim, Ranthambore, Bandhavgarh, and Ayodhya
• New Segments: Venturing into wildlife, spiritual, and heritage tourism, as well as serviced apartments
• Strategic Partnerships: Entered into a right of first offer agreement with a Brookfield affiliate to acquire hospitality assets
Investor Considerations
While the IPO has garnered significant anchor investment, retail investor response has been modest, with a 9% subscription on Day 2 Analysts suggest that the company's strong brand value and strategic expansion plans could offer long-term benefits, but potential and the company's financial trajectory. investors should consider market conditions.
