The stock market is hitting new highs, and many companies are jumping on the chance to go public with initial public offerings (IPOs). After recent IPO successes from a few renewable energy and non-banking firms, Schloss Bangalore, a well-known hotel chain, is ready to follow suit.
Schloss Bangalore, which runs the popular Leela Palaces, Hotels and Resorts, has already submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI), signalling its move toward the stock market.
Schloss Bangalore is aiming to raise around INR 5,000 crore through its IPO. If things go as planned, this could end up being the biggest public offering from the hotel industry in India’s stock market history.
Leela Palaces was started in 1986 by CP Krishnan Nair and is now owned by Brookfield Asset Management. As part of the IPO, Schloss is offering new shares worth INR 3,000 crore. At the same time, Project Ballet Bangalore Holdings (DIFC), which is linked to Brookfield, will be selling shares worth INR 2,000 crore.
Back in March 2019, Brookfield bought four Leela Palace hotels in Delhi, Bengaluru, Udaipur and Chennai from JM Financial Asset Reconstruction Company for INR 3,950 crore. Today, the company runs 12 hotels across 10 cities in India and has plans to open eight more by 2028.
Schloss managed to cut its annual losses significantly, dropping from INR 61.68 crore in March 2024 to just INR 2.13 crore. The hotel’s revenue per available room (RevPAR), an important measure in the industry, climbed nearly 23% year-on-year, reaching INR 9,592 in March 2024.
The IPO is being handled by 11 investment banks, including Kotak Mahindra Capital, JM Financial, BofA Securities, Morgan Stanley, JP Morgan, Axis Capital, Citi, ICICI Securities, IIFL Capital, Motilal Oswal and SBI Caps.
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