The stock market is witnessing a record surge, prompting numerous companies to seize this opportunity via initial public offerings (IPOs). Following successful IPOs from a few renewable and non-banking sector companies, hotel chain Schloss Bangalore is now preparing to come up with its issue.
Schloss Bangalore, which operates Leela Palaces, Hotels, and Resorts, has filed draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI).
Schloss Bangalore is looking to raise approximately Rs 5,000 crore. If successful, this would be the largest IPO in the hotel sector in the Indian stock market to date. Leela Palaces was founded in 1986 by CP Krishnan Nair and is currently owned by Brookfield Asset Management.
Schloss is issuing new shares worth Rs 3,000 crore, while shareholder Project Ballet Bangalore Holdings (DIFC), an affiliate of Brookfield Asset Management, is selling shares worth Rs 2,000 crore.
In March 2019, Brookfield acquired four Leela Palace properties in Delhi, Bengaluru, Udaipur, and Chennai from JM Financial Asset Reconstruction Company for Rs 3,950 crore. The company currently operates 12 hotels across 10 cities in India and plans to open eight new hotels by 2028.
Schloss's consolidated annual losses narrowed from Rs 61.68 crore in March 2024 to Rs 2.13 crore. Revenue per available room (RevPAR), a key metric for hotel owners and operators, rose nearly 23 per cent year-on-year to Rs 9,592 in March 2024. The Indian hospitality market is projected to grow from $24.6 billion in 2024 to $31 billion by 2029.
The IPO is being managed by 11 investment banks. They include Kotak Mahindra Capital, JM Financial, BofA Securities, Morgan Stanley, JP Morgan, Axis Capital, Citi, ICICI Securities, IIFL Capital, Motilal Oswal, and SBI Caps.