The Leela Lodges IPO, Schloss Bangalore IPO: Schloss Bangalore Ltd, which operates the enduring model The Leela, is poised to enter the capital market with its Preliminary Public Providing (IPO) on Monday, Might 26. The share sale window of the hospitality sector agency will open on Might 26, 2025, with a value band of Rs 413 to Rs 435 per share. With a complete concern measurement of Rs 3,500 crore, the problem contains a recent concern of Rs 2,500 crore and an offer-for-sale (OFS) value Rs 1,000 crore. The IPO is scheduled to shut on Might 28, 2025.
Allocation construction
By way of allocation, 75 per cent of the shares are reserved for Certified Institutional Patrons (QIBs), 15 per cent for Non-Institutional Patrons (NIBs), and the remaining 10 per cent for retail class.
Overview of the Leela Lodges
Schloss Bangalore operates 13 luxurious resorts throughout India, with a portfolio of three,553 keys beneath The Leela Palaces, Lodges & Resorts model.
The corporate adopts an asset-light mannequin, with solely 5 owned and managed properties, 7 beneath administration contracts and 1 beneath a franchise mannequin.
As of December 2024, the corporate has a presence in all 7 enterprise markets and three of the 5 leisure markets within the nation. The corporate accounts for almost 18 per cent of the luxurious lodge keys in these markets.
Must you subscribe to the IPO?
Analysts at Bajaj Broking have stated that the IPO is extra of a “turnaround and brand-led progress story” than a value-driven guess. The premium valuation already costs in future optimism.
“Buyers must be cautious, recognising that this IPO is essentially a guess on a turnaround and brand-led progress story, moderately than a price play based mostly on present fundamentals,” the brokerage stated.
Regardless of this, Bajaj Broking suggests subscribing with a long-term view.
In response to Bajaj Broking, the corporate has a damaging EPS (Rs –0.12) and a damaging web asset worth (Rs –160.57) that make valuation metrics like P/E and RoNW inapplicable or deceptive.
“This locations it at a major valuation premium to listed friends like Indian Lodges and EIH, each of that are constantly worthwhile,” in line with Bajaj Broking analysts.
Analysts at Anand Rathi have advisable subscribing to the IPO with a long-term perspective, citing the corporate’s model positioning and operational technique.
“Schloss Bangalore has a number one luxurious hospitality model with wealthy heritage and international enchantment, supported by marquee-owned resorts in high-entry-barrier markets,” Anand Rathi’s analysts stated.
“The corporate’s complete luxurious ecosystem leads to diversified income streams, and it has a monitor document of driving operational effectivity via an energetic asset administration method,” in line with them.
Anand Rathi believes the IPO is pretty priced given the corporate’s long-term progress potential and market management within the luxurious hospitality section.
SBI Securities is constructive on the IPO with out ranking
Whereas SBI Securities has not offered an express suggestion, it provides a largely constructive outlook on Schloss Bangalore’s fundamentals and prospects.
“On the higher value band, the corporate is valued at an FY25 EV/EBITDA a number of of 26.3x, based mostly on post-issue capital,” in line with SBI Securities
“Schloss’s presence within the luxurious hospitality house positions it properly for above-average sector progress within the coming years…IPO proceeds can be used to repay debt, decreasing the debt-to-equity ratio from 1.1x and bettering total profitability.
“Whereas valuation is reasonably excessive, the word highlights bettering monetary efficiency, sector tailwinds, and deleveraging plans as key positives,” SBI Securities’ analysts stated.
What are danger components in case you put money into?
Many analysts additionally highlighted a number of danger components associated to the Leela Lodge:
- The corporate has pledged sure property as collateral. Failure to satisfy debt obligations may result in seizure or compelled sale of those property.
- Any delays in renovating or refurbishing present owned resorts might harm operations and visitor expertise
- Delays or points within the completion of recent properties may result in misplaced income alternatives
- The enterprise closely will depend on the premium picture of “The Leela”. Any deterioration in model popularity may have an effect on revenues and future partnerships
Upcoming initiatives
Schloss Bangalore is increasing its portfolio with a number of under-development luxurious properties throughout the nation. Listed here are particulars of those enlargement plans of The Leela Lodges & Palace:
| Property & Location | Sort & section | Anticipated keys | Capex share (in Rs million) | Possession | Anticipated date to start out | Standing | FY25 ARR vary (in Rs per night time) |
|---|---|---|---|---|---|---|---|
| The Leela Palace, Agra | Palace, Heritage & Grandeur | 99 | 4,419 | 100% | 2028 | Approvals pending, building to start out | Rs 46,000 – Rs 51,000 |
| The Leela Palace, Srinagar | Palace, Hill Station | 170 | 1,899 | 50% | 2028 | Approvals pending for renovation | Rs 28,000 – Rs 33,000 |
| The Leela, Ayodhya | Lodge, Non secular | 100 | 2,997 | 76% | 2028 | Approvals pending | Rs 18,000 – Rs 23,000 |
| The Leela, Ranthambore | Resort, Heritage & Grandeur | 76 | 1,280 | 51% | 2028 | Approvals pending | Rs 49,000 – Rs 54,000 |
| The Leela, Bandhavgarh | Resort, Wildlife | 30 | 720 | 74% | 2028 | Approvals pending | Rs 48,000 – Rs 53,000 |
Anchor traders
Previous to its IPO opening, the corporate has raised Rs 1,575 crore from anchor traders.
The anchor portion acquired curiosity from a spread of home institutional traders comparable to HDFC Mutual Fund, ICICI Prudential Mutual Fund, Nippon India Mutual Fund, Mirae Asset Mutual Fund, Invesco Mutual Fund, and Aditya Birla Solar Life Insurance coverage. Whereas international traders additionally confirmed thier curiosity, together with sovereign funds and international portfolio traders (FPIs) like Suppose Make investments, Constancy, Norges Financial institution, Whiteoak, Lunate, UC Regents, TT Worldwide, and Ward Ferry.
Different particulars of the IPO
BRLMs: JM Monetary, BofA Securities, Morgan Stanley, JP Morgan, Kotak Mahindra Capital, Axis Capital, Citi, IIFL Capital, ICICI Securities, Motilal Oswal, and SBI Capital Markets
The minimal bid lot is ready at 34 shares. The registrar for the IPO is KFin Applied sciences Ltd.
