Leela Hotels' Parent Schloss Reduces IPO Size to ₹35 Billion in Face of Market Caution

Schloss Bangalore Limited, the Brookfield-owned owner of The Leela Palaces, Hotels, and Resorts, has reduced its much-awaited IPO size to ₹35 billion from the previously planned ₹50 billion, as per its prospectus. The move comes as the company adjusts to changing market conditions and sentiment in India's red-hot hospitality space.

 

Key Highlights

 

Smaller Issue Size: Schloss will raise ₹35 billion (₹3,500 crore) rather than ₹50 billion, with fresh issue and offer-for-sale portions cut back to accommodate lower current market appetite and facilitate a successful listing.

 

IPO Schedule: Leela Hotels IPO will open on May 26, 2025, and close on May 28 with listing on June 2 on BSE and NSE. The issue comprises a combination of fresh issue and sale of shares by Brookfield's subsidiary, Project Ballet Bangalore Holdings.

 

Use of Proceeds: Proceeds from the IPO will be used primarily for debt repayment and expansion, including eight new hotels and ventures into wildlife and heritage tourism by 2028, marking a strategic growth push after a significant financial turnaround.

 

Financial Performance: Schloss registered a steep decline in yearly losses to ₹21.3 million in FY24 from ₹616.8 million in the previous year, while revenue per available room (RevPAR) rose 23% to ₹9,592, indicative of robust demand for high-end stays.

 

Sector Context: The IPO comes on the back of a spate of hospitality listings and reviving investor interest, as India's hospitality sector looks to witness faster growth and higher global travel demand.

 

Schloss's re-tuned IPO is evidence of a practical strategy, weighing capital requirements with market conditions and driving The Leela's future growth.

 

Sources: Times of India, IPO Watch, Equity Market Insights, Skift, Bullsmart