Leela Hotels owner gears up for ₹3,500 crore IPO

Schloss Bangalore, the owner of the luxury hotel chain Leela Palaces Hotels & Resorts, on Wednesday said that it plans to raise up to 3,500 crore in an initial public offering (IPO) on May 26.

Schloss, which is backed by Brookfield Asset Management, said that it has fixed a price band of ₹413-435 per share for the IPO, which could be the largest in the country's hospitality sector. 

The initial share sale will be open for public subscription from May 26 to 28. The one-day bidding for anchor investors will open only on May 23, the company said in a statement.

The company's IPO is a combination of a fresh issue of equity shares worth ₹2,500 crore and offer for sale (OFS) of stocks valued at ₹1,000 crore by promoter Project Ballet Bangalore Holdings (DIFC) Pvt Ltd, according to the red herring prospectus (RHP). The company is valued at over ₹14,500 crore at the upper end of the price band, brokerages said.

Schloss plans to use the proceeds of the fresh issue to pay loans availed by the company and its subsidiaries, and for general corporate purposes. As of March 2025, the company had a total borrowing of over ₹3,900 crore, the prospectus showed.

Schloss Bangalore, known for its luxurious hotels and resorts under the "The Leela" brand, had a portfolio of 3,382 keys across 12 operational hotels as of May 31, 2024. Its portfolio includes The Leela Palaces, The Leela Hotels, and The Leela Resorts, located across 10 key Indian destinations.

On the financial front, the company has seen significant financial growth, with operating profit, or EBITDA, increasing from ₹87.72 crore in FY22 to ₹600.03 crore in FY24.

According to the HVS report, India's hospitality sector is set for strong growth as the country's GDP is expected to nearly double to USD 7.1 trillion by 2030 from USD 3.6 trillion in 2023. The luxury hotel segment, which makes up just 17 per cent of the branded hotel market, is underdeveloped. Further, demand for luxury rooms is projected to grow at a rate of 10.6 per cent annually from FY24 to FY28, while supply will increase only 5.9 per cent, the report noted.

Moreover, domestic tourism and foreign tourist arrivals are also expected to rise, with annual growth rates of 13.4 per cent and 7.1 per cent, respectively, from 2024 to 2030, it added.

The company announced that 75 per cent of the issue size has been reserved for qualified institutional buyers, 15 per cent for non-institutional buyers and the remaining 10 per cent for retail investors. Investors can bid for a minimum of 34 equity shares and in multiples of 34 thereafter.

Shares of the company are expected to list on the stock exchanges on June 2.