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The Leela name evokes luxury. Plush palaces, sweeping marble lobbies, and impeccable service. But when Schloss Bangalore —the company behind The Leela Hotels—opened its Rs 3,500 crore IPO on May 26, the reception was far from regal.
By the end of day 1, the IPO saw just 5 per cent subscription. That's despite backing from marquee investors like Goldman Sachs and Fidelity, who picked up Rs 1,575 crore worth of shares in the anchor round.
What's the market saying?
The response from retail investors was the most encouraging so far—about 17 per cent of their quota got subscribed. But institutions and HNIs were mostly on the sidelines.
| Investor category | Subscription (day 1) |
|---|---|
| QIBs | 3 per cent |
| NIIs | 2 per cent |
| RIIs | 17 per cent |
| Total | 5 per cent |
A small positive? The IPO is trading at a grey market premium (GMP) of Rs 15. That hints at a listing price around Rs 450, just a shade above the top end of the price band.
The numbers that matter
Leela Hotels has seen a turnaround of sorts.
-
FY25 revenue: Rs 1,301 crore (up 11 per cent YoY)
-
FY25 profit: Rs 47.7 crore (vs Rs 2.1 crore loss in FY24)
-
FY25 EBITDA: Rs 600 crore
- Net debt (as of March 2025): Rs 2,568 crore
Still, the IPO comes at a steep valuation. The asking P/E is over 300x—pricing in a lot of future growth.
What the company does
Schloss Bangalore owns and operates The Leela chain—13 luxury hotels in cities like Delhi, Mumbai, and Bengaluru. The brand caters to upscale Indian and international travellers, with around 3,400 rooms and expansion plans in the works.
Brookfield Asset Management owns the company, having acquired it in 2019 after the original promoters ran into financial trouble.
Leela Hotels IPO details
| Particulars | Details |
|---|---|
| Issue size | Rs 3,500 crore |
| Price band | Rs 413 - Rs 435 |
| Fresh issue | Rs 2,500 crore |
| Offer for sale (OFS) | Rs 1,000 crore |
| Lot size | 34 shares (Rs 14,790 at upper band) |
| Issue dates | May 26 - May 28 |
| Listing expected on | June 2, 2025 |
The fresh issue proceeds will mainly go towards debt repayment and general corporate purposes.
Final word
Leela Hotels has the brand, the assets, and heavyweight backers. But day 1 showed that pedigree alone isn't enough. While long-term investors bullish on India's luxury tourism story may want to keep this on their watchlist, others might be better off waiting. With two more days to go, the real test is whether institutional money starts flowing in—or if this one fades quietly.
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Disclaimer: This is not a stock recommendation. This story was created with the assistance of artificial intelligence and is intended for informational purposes only. Please take it with a pinch of salt and do your own research or consult a financial advisor before making investment decisions.
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