Leela Hotels IPO: Brookfield-backed Schloss Bangalore to launch public issue on May 26, eyes ₹3,500 crore

Leela Hotels IPO:  Schloss Bangalore, which operates the iconic "The Leela" brand of luxury hotels in India, is set to launch its initial public offering (IPO) on May 26, 2025. The ₹3,500 crore issue will include a fresh issue of ₹2,500 crore and an offer for sale (OFS) worth ₹1,000 crore.

The three-day IPO will close on May 28, with the shares likely to list on June 2 on both BSE and NSE. The price band and lot size are yet to be announced. The Brookfield-backed luxury hospitality giant slashed its IPO size by 30 per cent to ₹3,500 from  the initially planned ₹5,000 crore issue. 

Large "anchor" investors will get to bid on May 23. Schloss did not specify in its prospectus why it had cut the IPO size. The IPO is being managed by JM Financial, Kotak Mahindra Capital, Axis Capital, Morgan Stanley, and SBI Capital, among others. KFin Technologies is acting as the registrar to the issue.

Up to 75 percent of the public issue size is reserved for qualified institutional buyers, of which up to 60 percent portion (that comes to ₹1,575 crore) may be allocated to anchor investors . Further, 15 percent of the offer size is set aside for non-institutional investors, and the remainder 10 percent for retail investors.

Schloss Bangalore, incorporated in 2019, is among India’s largest luxury hospitality firms in terms of number of rooms. As of May 2024, the company operates 12 properties with 3,382 keys under The Leela Palaces, Hotels, and Resorts.

Five of these -- located in Bengaluru, Chennai, New Delhi, Jaipur, and Udaipur -- are wholly owned. These properties blend regal Indian architecture with modern hospitality, appealing to high-end business and leisure travellers.

In addition to rooms, the company operates 67 fine-dining restaurants and bars and 12 wellness centres. Its flagship spa at The Leela Palace Bengaluru is being developed in collaboration with luxury wellness brand Soneva

Schloss will sell fresh shares worth ₹2,500 crore, down from an initially planned ₹3,000 crore, while Brookfield plans to sell shares worth ₹1,000 crore - half of its original plan. The company, which runs 13 hotels, will use proceeds from the sale of new shares to repay its borrowings. Schloss Bangalore intends to utilise ₹2,300 crore out of net fresh issue proceeds for repayment of its debt, and the remainder for general corporate purposes. 

The book running lead managers handling the big-ticket size public issue are JM Financial, BofA Securities India, Morgan Stanley India Company, JP Morgan India, Kotak Mahindra Capital Company, Axis Capital, Citigroup Global Markets India, IIFL Capital Services, ICICI Securities, Motilal Oswal Investment Advisors, and SBI Capital Markets. KFin Technologies is the registrar to the issue.