India’s luxury hotel group Schloss Bangalore, which operates The Leela brand, is closing its ₹3,500 crore IPO on May 28. The offering has been subscribed 2.01 times so far, driven largely by QIBs. Backed by Brookfield Asset Management, the company aims to reduce its ₹39 billion debt and expand its portfolio in India’s growing luxury hospitality market.
Schloss Bangalore, the India-based operator of the renowned luxury hospitality chain The Leela Palaces, Hotels and Resorts, concluded its ₹3,500 crore initial public offering (IPO) today. The IPO, open from May 26 to May 28, was subscribed 2.01 times as of 13:39 IST, with strong demand led by Qualified Institutional Buyers (QIBs).
The company, headquartered in Karnataka, India, currently operates 12 high-end properties across 10 locations under three brands: The Leela Palaces, The Leela Hotels, and The Leela Resorts, with a combined total of 3,382 rooms.
Schloss Bangalore priced the IPO between ₹413–₹435 per share, offering a lot size of 34 shares. The offering consists of a fresh issue of ₹2,500 crore and an offer-for-sale (OFS) of ₹1,000 crore by its promoter, Project Ballet Bangalore Holdings (DIFC) Pvt Ltd. The IPO has a QIB allocation of 75%, 15% for non-institutional investors (NIIs), and 10% for retail investors.
As of May 28, the QIB portion was oversubscribed 3.34 times, while retail and NII segments saw 57% and 31% subscription, respectively. On the first two days, the IPO received tepid response with subscription rates at 6% and 17%.
The grey market premium (GMP) stands at ₹4.5, suggesting a modest expected listing price of ₹439.5 per share, just 1.03% above the upper end of the price band. Analysts note the GMP has dropped from a high of ₹20 during the pre-IPO period.
On the financial front, Schloss Bangalore reported EBITDA growth from ₹87.72 crore in FY22 to ₹600.03 crore in FY24. The proceeds from the fresh issue will primarily be used to reduce the company’s ₹39 billion debt, which analysts believe will strengthen its financials and support future growth.
Brokerage firms like Anand Rathi, Geojit Securities, and Indsec Securities have rated the IPO as “Subscribe” for long-term investors, citing strong brand equity, a growing luxury market in India, and reasonable valuations based on EV/EBITDA ratios.
The issue is managed by a consortium of 11 merchant bankers including JM Financial, Kotak Mahindra Capital, Morgan Stanley, and BofA Securities India.
With robust QIB participation and a long-term strategy focused on expansion and deleveraging, Schloss Bangalore’s IPO is seen as a significant move in India’s evolving hospitality and capital markets landscape.
