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Mint
26-05-2025
- Business
- Mint
Leela Hotels' ₹3,500 crore IPO to test investor appetite for India's luxury travel boom
Mumbai: Leela Palaces, Hotels and Resorts' ₹3,500 crore initial public offering (IPO)--the largest ever in Indian hospitality--is testing investor appetite for luxury tourism stocks amid a tepid primary market. The listing will expand the roster of publicly traded luxury hotel chains beyond Indian Hotels Company, which runs the Taj brand, and EIH Ltd, the parent of Oberoi Hotels. The offer includes a fresh issue of shares worth ₹2,500 crore and a ₹1,000 crore offer for sale by its New York-based promoter Brookfield Asset Management, according to the company's red herring prospectus. Investors can subscribe to shares of Schloss Bangalore, the sole owner of the Leela brand, at ₹413– ₹435 apiece during 26–28 May. The IPO also serves as a litmus test for sentiment in a sluggish primary market, especially with heavyweights like the National Stock Exchange still await clearance to list. Read this | Leela to retain its 'niche, complete luxury' hotel identity even after IPO: CEO Still, subdued investor sentiment has resulted in a more rational valuation for Leela's stock, despite recent fierce returns from rivals, said Taher Badshah, CIO at Invesco Asset Management (India). 'Leela may not necessarily offer immediate listing day gains. But it is definitely providing a cheap entry into the luxury segment which is expected to grow faster than the broader hospitality sector, especially in terms of value," Badshah said. Demand for premium experiences is driving a strong upcycle in the hotel industry, bolstering margins and profitability across luxury operators, according to industry experts. With high average room rates and strong brand positioning, luxury hotels are well-placed to sustain bottomline growth, something increasingly rare in India Inc. Leela currently operates 13 hotels, with average room rates (ARR) and revenue per available room (RevPAR) of ₹22,545 and ₹15,306, respectively, for FY25, about 1.4x the luxury segment average in India. It also boasts the highest Ebitda margin in the industry at nearly 50%, one of its key strengths, at least on paper. Chink in the armour However, the company's crushing net debt of ₹2,567 crore eats into most of its profits through interest payments. Despite its high operating profitability, Leela has posted losses until FY24 and is set to deliver the lowest net margin, at 3.4% among peers in FY25, per its prospectus. Much of the IPO proceeds of ₹2,300 crore will go towards debt repayment. That raises key questions: Will Leela have enough free cash flow to fund its capital expenditure plans? How will it strike a balance between growth and deleveraging? Read this | Travel startups and indulgent Indians: A match made over dream destinations and luxury escapades 'Post IPO, the company's net debt will be close to zero. This means there will be ample liquidity available through internal accruals to finance future capex," Ankur Gupta, managing partner and head of Asia Pacific and Middle East at Brookfield Asset Management told Mint. 'Even at the project level, we can borrow for construction and then pay it down with accruals from that property over a period of time. A combination of minimal debt and internal accruals should be sufficient for the current pipeline," he said. Leela plans to add 678 rooms across seven new hotels by 2028. Some will be owned and operated by Schloss Bangalore, while others will follow a management-contract model. The expansion includes palace-style hotels in Agra and Srinagar, wildlife resorts in Ranthambore and Bandhavgarh, a Hyderabad hotel, and serviced apartments near Mumbai airport. Still, analysts caution that rivals have more aggressive expansion plans to tap into India's growing demand for luxury hotels, potentially limiting its market share gains. In FY24, Leela's average occupancy rate stood at 63%, well behind Indian Hotels Company's 77%, underscoring the intensity of competition. Experts attribute this gap to stronger brand recall enjoyed by rivals like Taj and Oberoi. Leela's smaller, less diversified portfolio also makes it more vulnerable to seasonal swings in tourism demand, they noted. Since most of Leela's new properties won't be operational until 2028, the company also risks missing out on capitalising fully on the current luxury upcycle. Also read | Where are Indians travelling in 2025? That may partly explain its lower valuation: Leela has been priced at 27 times enterprise value to Ebitda for FY25, compared to 30–34x for peers like Chalet Hotels and IHCL, according to a source managing the IPO. Luxury tailwinds Despite slower volume growth, Leela's premium positioning could still deliver meaningful value growth. Supply addition is typically slower in the luxury segment, so room rates might hold up better even during a downturn, as consumers are less sensitive to prices in this segment, said Invesco's Badshah. In fact, India's luxury ARR at $175-200 is significantly lower than the global average of $579. Meanwhile Leela projects excess demand for luxury hotel rooms to result in an 8% compound annual growth rate for the industry's ARR till FY28, according to the red herring prospectus. This indicates a significant opportunity for value growth in the luxury segment given the current demand-supply mismatch expected to persist there. Also read | JP Morgan's Mookim seeks bright spots amid earnings lull in Indian markets 'Leela operates in and leads a niche segment which is somewhat immune to economic cycles. Now that it is somewhat cheaper, it can be a good long-term play," Badshah said.


Time of India
13-05-2025
- Business
- Time of India
India equity market: Indian market soars nearly 4% as geopolitical tensions ease
ADVERTISEMENT ADVERTISEMENT ADVERTISEMENT Mumbai: India's equity benchmarks jumped nearly 4% on Monday, posting their biggest single-day gain in four years, buoyed by stoppage of hostilities with Pakistan and a truce in the US-China tariff war. The thaw in frosty relations between the world's largest economies revived risk-on sentiment, sending safe-haven assets such as gold BSE Sensex jumped 2,975 points, or 3.7%, to close at 82,429.9. The NSE Nifty surged 916.7 points, or 3.8%, ending over 24,924. Both indices closed at their highest levels for the year, aided by the sharpest run-up in a day since February rally boosted the market capitalisation of BSE-listed companies by ₹16.9 lakh of hostilities on both fronts came as a significant reprieve for investors who have been on edge due to uncertainties over the outcome of geopolitical and economic conflicts in the past few weeks. While all Asian markets rallied after the US and China agreed to a 90-day pause on tariffs and slashed levies, Indian bourses got an extra fillip from the halt in fighting with Pakistan, forcing traders to liquidate bearish bets made late last week amid heightened tensions between the main share index soared 9% on Monday. "Today's (Monday's) market rally is a confluence of positive global and domestic developments - from easing geopolitical tensions between India and Pakistan, to progress on US-China trade talks," said Taher Badshah, chief investment officer at Invesco Mutual Volatility Index (VIX), the market's fear measure, plunged 15% to 18.4, in line with the equities rebound, indicating options traders see lower risks in the near term. Last week, this index had surged over 16% as the Sensex and Nifty declined 1.3% on fears of a full-blown conflict with the neighbouring broader market also ended strong, with the Nifty Midcap 150 jumping 3.75% and the Nifty Small-Cap 250 gaining 4%. Of the 4,254 stocks traded on the BSE, 3,545 advanced, while 576 bullish momentum may push the markets higher in the days ahead, but fund managers do not rule out intermittent sell-offs. "The market could see small doses of correction over the next few days after this massive rally," said Badshah. "But what has changed now is that it's now more of a buy-on-dips market, rather than a sell-on-rise market."The Sensex and Nifty are up nearly 13% since April 7, when the recent rebound started after Trump halted tariffs on imports from most countries, barring China, for 90 one of the best performers in recent times because of its safe-haven status, slumped nearly 3% on Monday in response to the pause in the US-China tariff conflict. "For investors, our view is that a clear framework of disciplined asset allocation matters more than reacting to noise," said Neelesh Surana, chief investment officer at Mirae Asset Investment sectoral indices in India ended in the green, with metals, realty, power, IT, and energy stocks leading the charge, rising between 4% and 6%. Foreign portfolio investors (FPIs) remained net buyers, purchasing shares worth Rs 1,246.5 crore on Monday. Domestic institutional investors (DIIs) also contributed to the rally, investing Rs 1,448.4 crore during the day.


Time of India
13-05-2025
- Business
- Time of India
And When the Bullets Stopped, Bulls Ran Free
India's equity benchmarks jumped nearly 4% on Monday, posting their biggest single-day gain in four years, buoyed by stoppage of hostilities with Pakistan and a truce in the US-China tariff war. The thaw in frosty relations between the world's largest economies revived risk-on sentiment, sending safe-haven assets such as gold tumbling. #Operation Sindoor The damage done at Pak bases as India strikes to avenge Pahalgam Why Pakistan pleaded to end hostilities Kashmir's Pahalgam sparks Karachi's nightmare The BSE Sensex jumped 2,975 points, or 3.7%, to close at 82,429.9. The NSE Nifty surged 916.7 points, or 3.8%, ending over 24,924. Both indices closed at their highest levels for the year, aided by the sharpest run-up in a day since February 2021. The rally boosted the market capitalisation of BSE-listed companies by ₹16.9 lakh crore. Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like AI guru Andrew Ng recommends: Read These 5 Books And Turn Your Life Around in 2025 Blinkist: Andrew Ng's Reading List Undo Easing of hostilities on both fronts came as a significant reprieve for investors who have been on edge due to uncertainties over the outcome of geopolitical and economic conflicts in the past few weeks. While all Asian markets rallied after the US and China agreed to a 90-day pause on tariffs and slashed levies, Indian bourses got an extra fillip from the halt in fighting with Pakistan, forcing traders to liquidate bearish bets made late last week amid heightened tensions between the neighbours. Pakistan's main share index soared 9% on Monday. 'Today's (Monday's) market rally is a confluence of positive global and domestic developments — from easing geopolitical tensions between India and Pakistan, to progress on US-China trade talks,' said Taher Badshah, chief investment officer at Invesco Mutual Fund. Live Events The Volatility Index (VIX), the market's fear measure, plunged 15% to 18.4, in line with the equities rebound, indicating options traders see lower risks in the near term. Last week, this index had surged over 16% as the Sensex and Nifty declined 1.3% on fears of a full-blown conflict with the neighbouring nation. The broader market also ended strong, with the Nifty Midcap 150 jumping 3.75% and the Nifty Small-Cap 250 gaining 4%. Of the 4,254 stocks traded on the BSE, 3,545 advanced, while 576 declined. The bullish momentum may push the markets higher in the days ahead, but fund managers do not rule out intermittent sell-offs. 'The market could see small doses of correction over the next few days after this massive rally,' said Badshah. 'But what has changed now is that it's now more of a buy-on-dips market, rather than a sell-on-rise market.' The Sensex and Nifty are up nearly 13% since April 7, when the recent rebound started after Trump halted tariffs on imports from most countries, barring China, for 90 days. Gold, one of the best performers in recent times because of its safe-haven status, slumped nearly 3% on Monday in response to the pause in the US-China tariff conflict. 'For investors, our view is that a clear framework of disciplined asset allocation matters more than reacting to noise,' said Neelesh Surana, chief investment officer at Mirae Asset Investment Managers. All sectoral indices in India ended in the green, with metals, realty, power, IT, and energy stocks leading the charge, rising between 4% and 6%. Foreign portfolio investors (FPIs) remained net buyers, purchasing shares worth Rs 1,246.5 crore on Monday. Domestic institutional investors (DIIs) also contributed to the rally, investing Rs 1,448.4 crore during the day.


Economic Times
13-05-2025
- Business
- Economic Times
Indian market soars nearly 4% as geopolitical tensions ease
Agencies Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Mumbai: India's equity benchmarks jumped nearly 4% on Monday, posting their biggest single-day gain in four years, buoyed by stoppage of hostilities with Pakistan and a truce in the US-China tariff war. The thaw in frosty relations between the world's largest economies revived risk-on sentiment, sending safe-haven assets such as gold BSE Sensex jumped 2,975 points, or 3.7%, to close at 82,429.9. The NSE Nifty surged 916.7 points, or 3.8%, ending over 24,924. Both indices closed at their highest levels for the year, aided by the sharpest run-up in a day since February rally boosted the market capitalisation of BSE-listed companies by ₹16.9 lakh of hostilities on both fronts came as a significant reprieve for investors who have been on edge due to uncertainties over the outcome of geopolitical and economic conflicts in the past few weeks. While all Asian markets rallied after the US and China agreed to a 90-day pause on tariffs and slashed levies, Indian bourses got an extra fillip from the halt in fighting with Pakistan, forcing traders to liquidate bearish bets made late last week amid heightened tensions between the main share index soared 9% on Monday. "Today's (Monday's) market rally is a confluence of positive global and domestic developments - from easing geopolitical tensions between India and Pakistan, to progress on US-China trade talks," said Taher Badshah, chief investment officer at Invesco Mutual Volatility Index (VIX), the market's fear measure, plunged 15% to 18.4, in line with the equities rebound, indicating options traders see lower risks in the near term. Last week, this index had surged over 16% as the Sensex and Nifty declined 1.3% on fears of a full-blown conflict with the neighbouring broader market also ended strong, with the Nifty Midcap 150 jumping 3.75% and the Nifty Small-Cap 250 gaining 4%. Of the 4,254 stocks traded on the BSE, 3,545 advanced, while 576 bullish momentum may push the markets higher in the days ahead, but fund managers do not rule out intermittent sell-offs. "The market could see small doses of correction over the next few days after this massive rally," said Badshah. "But what has changed now is that it's now more of a buy-on-dips market, rather than a sell-on-rise market."The Sensex and Nifty are up nearly 13% since April 7, when the recent rebound started after Trump halted tariffs on imports from most countries, barring China, for 90 one of the best performers in recent times because of its safe-haven status, slumped nearly 3% on Monday in response to the pause in the US-China tariff conflict. "For investors, our view is that a clear framework of disciplined asset allocation matters more than reacting to noise," said Neelesh Surana, chief investment officer at Mirae Asset Investment sectoral indices in India ended in the green, with metals, realty, power, IT, and energy stocks leading the charge, rising between 4% and 6%. Foreign portfolio investors (FPIs) remained net buyers, purchasing shares worth Rs 1,246.5 crore on Monday. Domestic institutional investors (DIIs) also contributed to the rally, investing Rs 1,448.4 crore during the day.


Time of India
13-05-2025
- Business
- Time of India
Indian market soars nearly 4% as geopolitical tensions ease
Mumbai: India's equity benchmarks jumped nearly 4% on Monday, posting their biggest single-day gain in four years, buoyed by stoppage of hostilities with Pakistan and a truce in the US-China tariff war. The thaw in frosty relations between the world's largest economies revived risk-on sentiment, sending safe-haven assets such as gold tumbling. The BSE Sensex jumped 2,975 points, or 3.7%, to close at 82,429.9. The NSE Nifty surged 916.7 points, or 3.8%, ending over 24,924. Both indices closed at their highest levels for the year, aided by the sharpest run-up in a day since February 2021. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now The rally boosted the market capitalisation of BSE-listed companies by ₹16.9 lakh crore. Easing of hostilities on both fronts came as a significant reprieve for investors who have been on edge due to uncertainties over the outcome of geopolitical and economic conflicts in the past few weeks. While all Asian markets rallied after the US and China agreed to a 90-day pause on tariffs and slashed levies, Indian bourses got an extra fillip from the halt in fighting with Pakistan, forcing traders to liquidate bearish bets made late last week amid heightened tensions between the neighbours. Agencies VIX Drops 15% Live Events Pakistan's main share index soared 9% on Monday. "Today's (Monday's) market rally is a confluence of positive global and domestic developments - from easing geopolitical tensions between India and Pakistan, to progress on US-China trade talks," said Taher Badshah, chief investment officer at Invesco Mutual Fund. The Volatility Index (VIX), the market's fear measure, plunged 15% to 18.4, in line with the equities rebound, indicating options traders see lower risks in the near term. Last week, this index had surged over 16% as the Sensex and Nifty declined 1.3% on fears of a full-blown conflict with the neighbouring nation. The broader market also ended strong, with the Nifty Midcap 150 jumping 3.75% and the Nifty Small-Cap 250 gaining 4%. Of the 4,254 stocks traded on the BSE, 3,545 advanced, while 576 declined. The bullish momentum may push the markets higher in the days ahead, but fund managers do not rule out intermittent sell-offs. "The market could see small doses of correction over the next few days after this massive rally," said Badshah. "But what has changed now is that it's now more of a buy-on-dips market, rather than a sell-on-rise market." The Sensex and Nifty are up nearly 13% since April 7, when the recent rebound started after Trump halted tariffs on imports from most countries, barring China, for 90 days. Gold, one of the best performers in recent times because of its safe-haven status, slumped nearly 3% on Monday in response to the pause in the US-China tariff conflict. "For investors, our view is that a clear framework of disciplined asset allocation matters more than reacting to noise," said Neelesh Surana, chief investment officer at Mirae Asset Investment Managers. All sectoral indices in India ended in the green, with metals, realty, power, IT, and energy stocks leading the charge, rising between 4% and 6%. Foreign portfolio investors (FPIs) remained net buyers, purchasing shares worth Rs 1,246.5 crore on Monday. Domestic institutional investors (DIIs) also contributed to the rally, investing Rs 1,448.4 crore during the day.