Leela hotels-owner Schloss cuts IPO size to ₹3,500 cr; sets price band at ₹413-435

Schloss Bangalore, which owns the luxury hotel brand 'The Leela', has announced the price band for its upcoming initial public offering (IPO), which will hit D-Street on May 26. The Brookfield-backed hotel chain operator has set the price band at ₹413-435 per share for the IPO, looking to raise ₹3,500 crore at the upper end of the issue price. The market capitalisation of the company is pegged to be around ₹10,155 crore.

Notably, the company has cut the IPO size significantly by 30%, or ₹1,500 crore, from ₹5,000 crore proposed in the draft red herring prospectus (DRHP) filed with the capital market regulator, Sebi, in September last year. The issue received approval from the Sebi in December 2024, and the company filed the red herring prospectus (RHP) with the Registrar of Companies on May 20.

Though Schloss did not cite or mention the reason for cutting the issue size significantly, the key reason is said to be the secondary market volatility amid geopolitical tensions and tariff tensions. Recently, Ather Energy, the first mainboard IPO of FY26, also reduced the size of its IPO to ₹2,626 crore from its initial target of ₹3,100 crore amid fragile market conditions and weak investor sentiment.

Key details about Schloss Bangalore IPO

The three-day public issue of Leela's owner will open for subscription on May 26 and close on May 28. The allotment of shares to eligible applicants is expected to be finalised on May 29, while shares are slated to be listed on the BSE and the NSE on June 2.

The IPO is a combination of fresh issue of 5.75 crore shares amounting to ₹2,500 crore and offer-for-sale of 2.30 crore shares worth ₹1,000 crore by selling shareholders.

The IPO lot size is 34 shares and in multiple thereafter, which means the minimum application amount for retail investors will be ₹14,042 for one lot.

As per the RHP filed with the Sebi, the company has reserved 75% of the shares for qualified institutional buyers (QIB), up to 15% for non-institutional institutional investors (NII), and remaining 10% for retail investors.

Schloss intends to use the net proceeds from the fresh issue for repayment of certain outstanding borrowings availed by the company. A part of the capital will be used for general corporate purposes. Out of ₹2,500 crore, the company will utilise ₹2,300 crore for paying debts.

As of May 31, 2024, Schloss Bangalore is one of India's largest luxury hospitality companies by number of keys—3,382 keys across 12 operational hotels. The portfolio includes The Leela Palaces, The Leela Hotels, and The Leela Resorts. Besides, it operates five owned hotels, six hotels under hotel management agreements, and one hotel owned and operated by a third-party under a franchise arrangement.

Plans to open eight new hotels

Going ahead, Schloss plans to expand its portfolio with eight new hotels, aggregating 833 keys or 24.63% of existing keys through 2028, which will be either developed, owned or managed by it. This includes modern palace hotels in Agra (Uttar Pradesh) and Srinagar (Union Territory of Jammu and Kashmir), resorts in Ranthambore (Rajasthan) and Bandhavgarh (Madhya Pradesh), a hotel in Hyderabad (Telangana), and serviced apartments in Mumbai’s (Maharashtra) international airport district.

For the year ended March 31, 2025, Schloss reported a revenue of ₹1,406 crore, while net profit stood around ₹48 crore.

JM Financial Limited, Bofa Securities India Limited, Morgan Stanley India Company Pvt Ltd, J.P. Morgan India Private Limited, Kotak Mahindra Capital Company Limited, Axis Capital Limited, Citigroup Global Markets India Private Limited, Iifl Securities Ltd, Motilal Oswal Investment Advisors Limited, and SBI Capital Markets Limited are the book running lead managers of the Leela Hotels IPO. Kfin Technologies Limited is the registrar for the issue.