IPO-bound 'The Leela' Palaces Hotels and Resorts investing Rs 1,131 cr in 5 properties

Economic Times

23-05-2025

Brookfield-backed Schloss Bangalore Ltd, which owns luxury hospitality brand 'The Leela' Palaces, Hotels and Resorts, is investing Rs 1,131 crore to develop five company-owned hospitality properties, comprising 475 rooms, in Agra, Srinagar, Bandhavgarh, Ranthambore and Ayodhya. Schloss Bangalore, which is launching its Rs 3,500 crore Initial Public Offer (IPO) on Monday, operates the hospitality brand Leela Palaces Hotels & Resorts. The company currently has 13 hotels, out of which 5 are company-owned while the other 8 are under its management.
ADVERTISEMENT "We are investing Rs 1,131 crore into the five upcoming owned hotels in Agra, Srinagar, Bandhavgarh, Ranthambore and Ayodhya having 475 keys overall," Ravi Shankar, Head Asset Management and Chief Financial Officer at The Leela Palaces, Hotels and Resorts, told PTI.
The five owned hotels are expected to commence operations by 2028, according to the company's red herring prospectus (RHP).
Shankar shared that it will be a debt-free company after raising Rs 3,500 crore through the IPO, as the primary proceeds of close to Rs 2,500 crore will be used to pay off debt. The luxury hospitality brand was acquired by Canada-based investment management firm Brookfield in 2019, which proposes to dilute its stake by 24 per cent post the Rs 3,500-crore initial public offering (IPO), being touted as the largest IPO yet in the hospitality segment, bringing it down to 76 per cent. Ankur Gupta, Head of Asia Pacific and Middle East for Brookfield's Real Estate Group, said, "At the upper end of the price our ownership will be roughly 76 per cent post-IPO, so 24 per cent dilution, including offer for sale at the price when I bought it."
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"We have 20 hotels, out of which 13 are operational. We own five hotels, which is 35 per cent of our total portfolio. We have 678 keys in active stages of development at various stages. Nearly 65 per cent of our portfolio is through our managed hotels," Shankar said.
The Rs 3,500-crore IPO opens on Monday at a price band of Rs 413-435 per share, and is a combination of a fresh issue of equity shares worth Rs 2,500 crore and offer for sale (OFS) of stocks valued Rs 1,000 crore by promoter Project Ballet Bangalore Holdings (DIFC) Pvt Ltd.
ADVERTISEMENT As of March 2025, the company had a total borrowings of over Rs 3,900 crore, the red herring prospectus showed. Schloss Bangalore, which operates 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 Rs 87.72 crore in FY22 to Rs 600.03 crore in FY24.
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