Schloss Bangalore Limited is set to launch its Initial Public Offering (IPO) from May 26 to May 28, 2025, offering investors a unique opportunity to invest in one of India’s premier luxury hospitality operators. The company owns, operates, manages, and develops luxury hotels and resorts under the renowned “The Leela” brand, which has consistently been recognized among the world’s top hospitality brands, securing the #1 rank globally in 2020 and 2021, and maintaining a position in the top three in 2023 and 2024 according to Travel + Leisure World’s Best Awards Surveys.

IPO Issue Details

The Book Built Issue IPO is priced between ₹413 and ₹435 per equity share, with a total issue size of ₹3,500 Crores. The issue is composed of:

• Fresh Issue: 574.71 lakh shares worth ₹2,500 Crores.

• Offer for Sale: 229.88 lakh shares worth ₹1,000 Crores.

The IPO lot size is fixed at 34 shares, meaning retail investors must invest a minimum of ₹14,790 at the upper price band, while High-Net-Worth Individuals (HNIs) need to apply for at least 14 lots (476 shares) amounting to ₹2,07,060. Upon successful listing, the company’s market capitalization at the upper price band will be approximately ₹14,527.16 Crores.

The shares will be listed on the BSE and NSE, with the tentative listing date expected on or around June 2, 2025. The allotment of shares will be finalized by May 29, 2025.

Book Running Lead Managers & Registrar

The IPO is managed by a consortium of prominent book running lead managers, including JM Financial Limited, BofA Securities India Limited, Morgan Stanley India Company Private Limited, J.P. Morgan India Private Limited, Kotak Mahindra Capital Company Limited, Axis Capital Limited, Citigroup Global Markets India Private Limited, IIFL Capital Services Limited, ICICI Securities Limited, Motilal Oswal Investment Advisors Limited, and SBI Capital Markets Limited. KFin Technologies Limited is appointed as the registrar for the IPO.

Grey Market Premium (GMP) and Subscription Status

The Grey Market Premium for Schloss Bangalore IPO currently stands at ₹0, indicating no premium over the IPO price band in unofficial markets. This suggests modest demand for listing gains. It is important to note that GMP is unofficial, unregulated, and highly speculative, hence it should not be relied upon for investment decisions.

As of 10:30 AM on May 27, 2025, the IPO subscription has reached 0.08 times on its second day, indicating a cautious market response at this stage of the subscription period. Investors can track the live subscription status on the BSE website and other official portals.

Anchor Investors Participation

Schloss Bangalore has successfully raised ₹1,574.99 Crores from anchor investors at ₹435 per share. A total of 26,206,896 equity shares have been allocated to anchor investors from the Qualified Institutional Buyers (QIB) quota, indicating strong institutional interest in the issue.

How to Check IPO Allotment Status

The allotment status for Schloss Bangalore IPO will be available on May 29, 2025 on the registrar’s website. Investors can check their status by:

• Visiting the IPO allotment page.

• Selecting “Schloss Bangalore Limited IPO” from the dropdown menu.

• Entering their application number, PAN, or DP Client ID.

• Submitting details to view allotment outcome.

Financial Performance & Valuation

Schloss Bangalore has demonstrated a steady recovery in revenues and profitability post-pandemic, with total revenues rising from ₹4,159.49 Million in FY22 to ₹14,065.56 Million in the period ended March 31, 2025. EBITDA also showed strong growth from ₹877.19 Million in FY22 to ₹7,001.68 Million by March 2025. The company reported a Profit after Tax (PAT) of ₹476.58 Million for the period ended March 31, 2025, marking a significant turnaround from losses in previous years.

The company’s pre-issue EPS stands at ₹1.97, while the post-issue EPS is ₹1.43 for FY24. The IPO is priced at a premium, with a pre-issue P/E ratio of 220.18x and a post-issue P/E ratio of 304.82x, which is substantially higher than the industry average P/E of 95.00x. Return on Equity (ROE) for FY24 is modest at 1.32%, reflecting the capital-intensive nature of the hospitality business and ongoing recovery.

IPO Objectives

Proceeds from the IPO will primarily be used for:

• Repayment/prepayment of certain outstanding borrowings totaling ₹23,000 Million, partly by the company and its subsidiaries.

• General corporate purposes to support operational and expansion plans.

Expert Review and Recommendation

Given the fully priced nature of the IPO, combined with a current Grey Market Premium of zero and high P/E multiples, the IPO may not offer immediate listing gains. Investors are advised to carefully assess the long-term growth prospects of Schloss Bangalore and the luxury hospitality sector before subscribing. Cautious investors may consider avoiding this IPO for listing gains but could explore it for strategic, long-term investment based on brand strength and market positioning.

The Upcoming IPOs in this week and coming weeks are 3B Films, N R Vandana Tex Industries, Scoda Tubes,Neptune Petrochemicals, Victory Electric Vehicles International, Wagons Learning.

The Current active IPO are Blue Water Logistics, Astonea Labs, Nikita Papers, Prostarm Info Systems, Aegis Vopak Terminals, Schloss Bangalore.

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