Schloss Bangalore Limited owns, operates, manages, and develops luxury hotels and resorts under the renowned The Leela brand. The Leela brand was ranked as the #1 hospitality brand worldwide in 2020 and 2021, and among the top three hospitality brands globally in 2023 and 2024 by Travel + Leisure World's Best Awards Surveys.

The company is launching a significant Initial Public Offering (IPO) through a book-built issue amounting to ₹3500 crores. The IPO comprises a fresh issue of 574.71 lakh shares worth ₹2500 crores and an offer for sale of 229.88 lakh shares totaling ₹1000 crores. The subscription window opens on May 26 2025 and closes on May 28 2025. The allotment is expected on or about May 29 2025, with the tentative listing date on June 2 2025 on both the BSE and NSE stock exchanges.

The price band is fixed between ₹413 and ₹435 per equity share. At the upper price, the company’s market capitalization will be approximately ₹14527.16 crores. The lot size for the IPO is 34 shares, with a minimum retail investment of ₹14790. High-Net-Worth Individuals (HNIs) must subscribe for a minimum of 14 lots or 476 shares, totaling ₹207060.

The IPO is managed by a consortium of leading investment banks including JM Financial, BofA Securities, Morgan Stanley, JP Morgan, Kotak Mahindra Capital, Axis Capital, Citigroup Global Markets, IIFL Capital, ICICI Securities, Motilal Oswal, and SBI Capital Markets. The registrar for the issue is KFin Technologies Limited.

Financial Performance

The company’s financial growth over the recent years is notable (figures in million ₹):

• Revenue from operations:

  • FY2022: 4159.49

  • FY2023: 9032.67

  • FY2024: 12265.00

  • 12 months ended Mar 31, 2025: 14065.56

• EBITDA:

  • FY2022: 877.19

  • FY2023: 4236.29

  • FY2024: 6000.26

  • 12 months ended Mar 31, 2025: 7001.68

• Profit After Tax (PAT):

  • FY2022: -3198.29 (loss)

  • FY2023: -616.79 (loss)

  • FY2024: -21.27 (loss)

  • 12 months ended Mar 31, 2025: 476.58 (profit)

The company shows a return to profitability in the latest period, indicating steady financial improvement.

Key ratios for FY24 include a pre-issue Earnings Per Share (EPS) of ₹1.97 and a post-issue EPS of ₹1.43. The pre-issue Price to Earnings (P/E) ratio is very high at 220.18x, rising to 304.82x post-issue, significantly above the industry average P/E ratio of 95x. The Return on Equity (ROE) and Return on Net Worth (RoNW) stand at 1.32 percent, reflecting modest profitability margins.

Grey Market Premium and Market Outlook

The Grey Market Premium (GMP) is zero, implying no anticipated gains on the listing day. GMP, which reflects informal demand and supply, should be viewed cautiously by investors.

Promoters and Industry Context

The promoters include several DIFC-based holding companies: Project Ballet Bangalore Holdings, BSREP III Joy (Two) Holdings, BSREP III Tadoba Holdings, Project Ballet Chennai Holdings, Project Ballet Gandhinagar Holdings, Project Ballet HMA Holdings, and Project Ballet Udaipur Holdings.

The company operates in the luxury hospitality segment, a sector poised for recovery and growth following disruptions caused by the pandemic, supported by strong brand recognition of The Leela.

Risks and Considerations

• Extremely high P/E ratios indicate the IPO is fully priced with limited margin for appreciation

• Historical losses before FY25 raise concerns on profitability sustainability

• Listing on main exchanges offers better liquidity but market volatility in hospitality sector remains a risk

• Zero GMP suggests minimal speculative interest and no listing gains expected

Conclusion

Schloss Bangalore IPO provides an opportunity to invest in a globally recognized luxury hotel brand with improving financials but comes at a very high valuation. Investors should weigh the premium pricing and past losses carefully.

Final Recommendation

Investors looking for listing day gains should avoid Schloss Bangalore IPO. Long-term investors must assess the risks of high valuation against the potential recovery of luxury hospitality.

The Upcoming IPOs in this week and coming weeks are Neptune Petrochemicals, Aegis Vopak Terminals, Schloss Bangalore, Astonea Labs, Nikita Papers, Prostarm Info Systems, Victory Electric Vehicles International, Blue Water Logistics, Wagons Learning.

The Current active IPO are Unified Data - Tech Solutions, Dar Credit and Capital, Belrise Industries.

The Closed IPOs are Borana Weaves.