Suite Opportunity: Leela Hotels Rolls Out the Red Carpet for IPO Investors

Updated: May 22, 2025 13:39

Image Source: Trade Brains

Schloss Bangalore Limited, which owns the legendary "The Leela" brand, will open its much-awaited ₹3,500 crore IPO for subscription on May 26, 2025. Following are the 10 important things that investors must know from the Red Herring Prospectus (RHP):

1. IPO Dates and Listing

Subscription Window: May 26 to May 28, 2025
Anchor Investor Bidding: May 23, 2025
Tentative Listing Date: June 2, 2025, on BSE as well as NSE

2. Structure of IPO

Total Size: ₹3,500 crore (reduced from a previous plan of ₹5,000 crore)
Fresh Issue: ₹2,500 crore
Offer for Sale (OFS): ₹1,000 crore by promoter Project Ballet Bangalore Holdings (DIFC), which is a Brookfield subsidiary

3. Price Band and Lot Size

Price Band: ₹413 – ₹435 per share
Face Value: ₹10 per share
Lot Size: 34 shares per lot
Minimum Retail Investment: ₹14,790 at the upper band

4. Grey Market Premium (GMP)

On May 22, 2025, the IPO is being quoted at a GMP of ₹14–18 per share, which represents a reasonable 3–4% premium over the higher price band.

5. Company Profile and Portfolio

Schloss Bangalore was founded in 1986 and is based on "The Leela" brand.
As of May 2024, it has 12–13 keys of luxury hotels with 3,382–3,553 keys in India under direct ownership, management contracts, and franchise agreements.

6. Financial Performance

FY25 Revenue: ₹1,406.56 crore (14.7% increase from previous year)
FY25 Profit After Tax: ₹47.66 crore (reversing a loss of ₹2.13 crore in FY24)
Net Worth: ₹3,604.99 crore
Total Assets: ₹8,266.16 crore
Borrowings: Decreased by 8% to ₹3,908.75 crore as of March 2025

7. Utilization of IPO Proceeds

The majority of the new issue (₹2,300–2,500 crore) will go towards repayment or prepayment of part of the company's and its subsidiaries' borrowings, strengthening the balance sheet as well as cutting down interest expenses.

8. Share Allocation

Qualified Institutional Buyers (QIBs): 75% (with a maximum of 60% for anchor investors)
Non-Institutional Investors (NIIs): 15%
Retail Investors: 10%

9. Market Context and Growth Prospects

The IPO is at a time of sharp revival in India's luxury hospitality industry on the back of growing domestic and foreign tourism.
The Leela is situated among the country's largest luxury hotel operators, with an emphasis on growing its asset-light structure and operational efficiency under Brookfield's stewardship.

10. Key Risks and Considerations

The Indian luxury hotel segment is still underdeveloped with supply growth trailing demand.

Investors need to watch out for post-listing performance, particularly margin growth, occupancy levels, and debt reduction.

Sources: myinvestmentideas.com, Deccan Herald, tradebrains.in, onmanorama.com, upstox.com, business-standard.com, groww.in, moneycontrol.com

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