The Leela luxury hotel chain’s parent Schloss Bangalore has filed draft red herring papers (DRHP) for a ₹5,000 crore ($599 million) initial public offering (IPO) on September 20, data on the exchanges showed.
As per the exchange filing, Schloss is eyeing fresh issue of shares worth ₹3,000 crore, and shareholder Project Ballet Bangalore Holdings (DIFC), will sell shares worth ₹2,000 crore. DIFC is an affiliate of Brookfield Asset Management Company (AMC).
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Biggest Hospitality IPO
The book running managers are JM Financial, BoAf Securities India, Morgan Stanley India, JP Morgan India, Kotak Mahindra Capital, Axis Capital, Citigroup Global Markets India, IIFL Securities, ICICI Securities, Motilal Oswal Investment Advisors, and SBI Capital Markets.
The filing noted that a pre-IPO placement is under consideration, and if undertaken shall not exceed 20 per cent of the size of fresh issue. Details will be made in the red herring prospectus (RHP).
The IPO would be the biggest in India’s hospitality space. “It will be the largest issue in the hotel space,” a source told Livemint in June, when speculations arose of a likely IPO.
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The shares will be of face value of ₹10 each, the company added. The combination fresh issue and offer for sale (OFS) aims to repay debt, as per a Reuters report.
Brookfield has been infusing capital into the company over the past five years, since 2019, expanding the number of The Leela properties in India to 15 now, with plans to increase it to 20 soon, Mint reported in June.
The Leela’s turnaround may partly be attributed to the sharp rebound in the hospitality industry after the end of the COVID-19 pandemic.
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About Schloss
Schloss’ consolidated annual losses narrowed to 213 million rupees in fiscal-ended March 2024 from 616.8 million rupees, a year ago, the Reuters report added.
Revenue per available room (RevPAR), a key metric for hotel owners and operators, rose nearly 23 per cent year-on-year (YoY) to 9,592 rupees in the fiscal-ended March 2024.
India’s hospitality market is estimated to grow to $31 billion by 2029, from $24.6 billion in 2024.
