Schloss Bangalore Limited, a prominent luxury hospitality company managing the prestigious “The Leela” brand, is set to launch its Initial Public Offering (IPO) from May 26 to May 28, 2025. This Book Built Issue aims to raise a total of ₹3,500 Crores, comprising a Fresh Issue of ₹2,500 Crores (574.71 lakh shares) and an Offer for Sale worth ₹1,000 Crores (229.88 lakh shares). The company is known for owning, operating, managing, and developing luxury hotels and resorts under “The Leela” brand, which has been recognized as the #1 hospitality brand globally in 2020 and 2021, and remains among the top three in 2023 and 2024 according to Travel + Leisure World’s Best Awards Surveys.

IPO Details & Timeline

• Price Band: ₹413 to ₹435 per equity share

• Market Capitalisation at Upper Band (₹435): Approx ₹14,527 Crores

• Lot Size: 34 shares per lot

• Minimum Investment: ₹14,790 for retail investors; ₹2,07,060 for High Net Worth Individuals (HNIs)

• Subscription Period: May 26 - May 28, 2025

• Allotment Date: Expected on or about May 29, 2025

• Listing Date: Tentatively June 2, 2025, on BSE & NSE

The IPO is managed by leading financial institutions including JM Financial, BofA Securities, Morgan Stanley, J.P. Morgan, Kotak Mahindra Capital, Axis Capital, Citi, IIFL Capital, ICICI Securities, Motilal Oswal, and SBI Capital Markets. The registrar for the issue is KFin Technologies Limited.

Financial Performance

Schloss Bangalore’s financial trajectory shows promising growth:

• Revenue: Increased from ₹4,159.49 million in FY22 to ₹14,065.56 million in the period ending March 31, 2025.

• EBITDA: Rose steadily from ₹877.19 million in FY22 to ₹7,001.68 million by FY25.

• Profit After Tax (PAT): Turned positive with ₹476.58 million in the recent period, recovering from losses in previous years.

However, the IPO valuation metrics indicate a premium pricing:

• Pre-issue EPS: ₹1.97, Post-issue EPS: ₹1.43 (FY24)

• Pre-issue P/E Ratio: 220.18x, Post-issue P/E Ratio: 304.82x compared to the industry average of 95.00x

• Return on Equity (ROE) and Return on Net Worth (RoNW): Both at 1.32% for FY24

These figures suggest the IPO is priced at a premium relative to industry peers, reflecting investor expectations of Schloss Bangalore’s future growth but also implying limited margin for listing gains.

Grey Market Premium (GMP) & Subscription Status

As of May 21, 2025, the Grey Market Premium (GMP) for Schloss Bangalore IPO is ₹0, indicating no expected listing gain or discount based on unofficial market activity. Grey Market Premium reflects the demand-supply dynamics in unregulated markets and is not an official price discovery tool.

Live subscription data on the IPO’s opening day, May 26, 2025, at 11:00 AM, showed the issue was subscribed 0.02 times, indicating early interest but yet to reach full subscription. Investors can track subscription status live via BSE or NSE portals.

Anchor Investor Participation

Schloss Bangalore successfully raised ₹1,574.99 Crores from anchor investors who were allocated 2,62,06,896 equity shares at ₹435 per share. Anchor investors’ commitment reflects confidence from institutional investors and sets a benchmark for retail and HNI participation.

IPO Objectives

The net proceeds from the IPO will primarily be used to:

1. Repay or prepay outstanding borrowings of about ₹23,000 million (₹11,025 million for the company and ₹11,975 million for subsidiaries such as Schloss Chanakya, Schloss Chennai, Schloss Udaipur, and TPRPL).

2. Cover general corporate purposes, supporting business growth and operational needs.

How to Check IPO Allotment

Post IPO subscription, allotment results will be available on May 29, 2025, on the registrar's website. Investors can check their status by:

• Visiting the IPO allotment status page

• Selecting "Schloss Bangalore Limited IPO"

• Entering Application Number, PAN, or DP Client ID

• Submitting to view allotment results

Expert Recommendation

Given the premium post-issue P/E ratio of 304.82x which is significantly higher than the industry average, along with a neutral Grey Market Premium, Schloss Bangalore IPO appears fully priced. The recent financials show turnaround to profitability but at modest ROE levels, indicating that listing gains may be limited or nil. Investors looking for short-term listing profits may want to exercise caution. Those with long-term belief in luxury hospitality growth and the Leela brand could consider the IPO for strategic investment but at a fair understanding of valuation risks.

The Upcoming IPOs in this week and coming weeks are 3B Films, N R Vandana Tex Industries, Scoda Tubes,Neptune Petrochemicals, Astonea Labs, Nikita Papers, Prostarm Info Systems, Victory Electric Vehicles International, Blue Water Logistics, Wagons Learning..

The Current active IPO are Aegis Vopak Terminals, Schloss Bangalore, Unified Data - Tech Solutions.

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