Leela Palaces, Hotels & Resorts Set to Launch Historic IPO
Schloss Bangalore has officially filed draft papers with the Securities and Exchange Board of India (SEBI) for a monumental Initial Public Offering (IPO) estimated at ₹5,000 crore. This IPO, which is poised to be the largest in the Indian hotel sector’s history, aims to elevate the Leela brand in the competitive landscape of luxury hospitality.
About Leela Palaces, Hotels & Resorts
Founded in 1986 by CP Krishnan Nair, Leela Palaces, Hotels & Resorts has established itself as a symbol of luxury and elegance in the hospitality industry. Currently owned by a real estate fund associated with Brookfield Asset Management, the Leela brand boasts a presence in 12 key locations across India, including:
- New Delhi
- Bangalore
- Chennai
- Udaipur
- Jaipur
- Gurugram
- Mumbai
Out of these locations, Leela operates five company-owned hotels, while six are managed through hotel management agreements. Additionally, one hotel operates under a franchise arrangement. This diverse portfolio reflects the brand’s commitment to excellence and strategic growth.
Details of the IPO
| Component | Amount (₹ crore) |
|---|---|
| New Shares Issued | 3,000 |
| Offer for Sale | 2,000 |
| Total IPO Size | 5,000 |
As per the draft red herring prospectus, ₹3,000 crore will be raised through the issuance of new shares, while an additional ₹2,000 crore will come from the offer for sale by the promoter, Project Bale Bangalore Holdings (DIFC). The company is also looking to secure ₹600 crore in a pre-IPO funding round before the final filing.
Use of Funds
Significantly, ₹2,700 crore of the funds raised from the IPO will be allocated towards repaying existing debt, which amounted to ₹4,052.5 crore as of May 2024. The remaining funds will be utilized for general corporate purposes, potentially fueling further growth and investment into the brand.
Management of the IPO
A total of 11 leading investment banks will manage the share sale, including notable names such as:
- Kotak Mahindra Capital
- JM Financial
- BofA Securities
- Morgan Stanley
- JP Morgan
- Axis Capital
- Citi
- ICICI Securities
- IIFL Capital
- Motilal Oswal
- SBI Caps
KFin Technologies will serve as the registrar for the IPO, ensuring a streamlined process for investors.
Conclusion
The impending IPO of Leela Palaces, Hotels & Resorts signifies not only a significant milestone for the brand but also a transformative moment for the Indian hospitality sector. With robust financial backing and a recognized reputation for luxury, this IPO is anticipated to attract significant investor interest, paving the way for future growth and expansion in both domestic and international markets.
