Leela Hotels owner Schloss Bangalore IPO: Check day 2 subscription, latest GMP & more

The initial public offering (IPO) of Schloss Bangalore continued to witness muted bidding from the investors during the second and day of the bidding process from all the categories of the investors. The issue, which kicked off on Monday, May 26 was booked only six per cent on day one.

Schloss Bangalore is selling its shares in the price band of Rs 413-435 apiece. Investors can apply for a minimum of 34 shares and its multiples thereafter. It is looking to raise Rs 3,500 crore via IPO, which includes a fresh share sale of Rs 2,500 crore and offer-for-sale of up to 2,29,88,505 equity shares worth Rs 1,000 crore.

According to the data, the investors made bids for 57,52,222 equity shares, or only 12 per cent, compared to the 4,66,10,169 equity shares offered for the subscription by 3.25 pm on Tuesday, May 27, 2025. The three-day bidding for the issue shall conclude on Wednesday, May 28.

The allocation for retail investors was subscribed 38 per cent, while the portion reserved for non-institutional investors (NIIs) saw a subscription of only nine per cent. However, the quota set aside for qualified institutional bidders (QIBs) was booked merely six per cent as of the same time.

Brookfield-backed Schloss Bangalore, established in March 2019, is a luxury hospitality company operating under 'The Leela' brand in India. It owns, operates, manages, and develops luxury hotels and resorts, offering premier accommodations and personalised services inspired by Indian hospitality.

The grey market premium (GMP) of Schloss Bangalore has remained seen a correction amid the muted bidding for the issue. Last heard, the company was commanding a premium of Rs 10 per share in the unofficial market, suggesting a 2-3 per cent listing gains for the investors. The GMP stood around Rs 20 before the issue kicked-off.

Analysts mostly have a positive view on this issue. They see rising demand for luxury hospitality, strong parentage of Brookfield, strategic locations, plans to reduce debts and expansion plans overseas as key positives. However, Richly priced issues, dependence on select prosperities for major revenue share, just turned profitable this year are the major concerns for the IPO.

Structurally, the Indian luxury hotel industry remains underpenetrated, with ARR levels significantly trailing global benchmarks. Coupled with a persistent demand-supply imbalance, the long-term growth outlook remains robust, said Indsec Research. "On robust expansion, deleveraging on cards and positive industry factors, we assign 'subscribe' rating on the issue," it said.

For the financial year ended on March 31, 2025, the company reported a net profit of Rs 47.66 crore with a revenue of Rs 1,406.56 crore. The company clocked a net loss of Rs 2.13 crore with a revenue of Rs 1,226.50 crore for the fiscal year 2023-24. The market capitalization of Leela Hotels IPO stands at Rs 10,155.36 crore.

Schloss Bangalore has raised Rs 1,575 crore via anchor book by allocating 3.62 crore equity shares to anchor investors at a price of Rs 435 apiece. It has reserved 75 per cent of the net issue for the qualified institutional bidders (QIBs), while non-instructional investors (NIIs) will have 15 per cent of the allocation in the issue. Retail investors will have 10 per cent for the allocation.

Leela has a strong brand recall in the Indian luxury hospitality space, consistently being recognised as one of the best brands globally. Its RevPAR across it’s owned portfolio was 1.4 times of the overall luxury hotel segment average in India, reflecting Leela’s premium market positioning and brand strength in luxury hospitality industry, said Nirmal Bang Securities.

"Schloss Bangalore plans to add more properties to its portfolio either organically or through acquisitions and improve the operational efficiencies to drive the revenues and profitability in the future. The issue is available at 27 times its FY25 EV/Ebitda and we recommend ‘subscribe’ to the issue," it added.

JM Financial, BofA Securities India, Morgan Stanley India Company, JP Morgan India, Kotak Mahindra Capital Company, Axis Capital, Citigroup Global Markets India, IIFL Securities, Motilal Oswal Investment Advisors, SBI Capital Markets are the book running lead managers of the Leela Hotels IPO, while Kfin Technologies is the registrar for the issue.