Schloss Bangalore Limited, a premier luxury hotel operator and developer under the renowned “The Leela” brand, has launched its Initial Public Offering (IPO) with a substantial issue size of ₹3,500 Crores. This issue is a Book Built Issue, comprising a Fresh Issue of 574.71 Lakh shares worth ₹2,500 Crores and an Offer for Sale (OFS) of 229.88 Lakh shares worth ₹1,000 Crores. The IPO opens on May 26, 2025, and closes on May 28, 2025, with the allotment expected on or around May 29, 2025. Shares will be listed on the BSE and NSE tentatively on June 2, 2025.

About Schloss Bangalore and The Leela Brand

Schloss Bangalore owns, operates, manages, and develops luxury hotels and resorts under the “The Leela” brand, which has consistently been recognized as a top hospitality brand globally. The Leela was ranked #1 in 2020 and 2021 and among the top three hospitality brands in 2023 and 2024 by Travel + Leisure World’s Best Awards Surveys. This recognition underscores the brand’s premium positioning and strong market presence in luxury hospitality.

IPO Price Band and Market Capitalization

The IPO's price band is fixed between ₹413 to ₹435 per equity share, with a market capitalization of approximately ₹14,527.16 Crores at the upper price band. The lot size for retail investors is 34 shares, with a minimum investment of ₹14,790. High-Net-Worth Individuals (HNIs) are required to apply for a minimum of 14 lots (476 shares), amounting to ₹2,07,060.

Book Running Lead Managers and 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, J.P. Morgan India, Kotak Mahindra Capital, Axis Capital, Citigroup Global Markets, IIFL Capital, ICICI Securities, Motilal Oswal, and SBI Capital Markets. The registrar handling the IPO allotment is KFin Technologies Limited.

Grey Market Premium (GMP)

Currently, the Grey Market Premium is ₹0, indicating no expected listing gains based on the company’s financials and IPO pricing. The GMP reflects the unorganized demand and supply before listing and is purely informational, with no official trading.

Live Subscription Status

As of 7:00 PM on May 28, 2025, the IPO was subscribed 4.50 times, indicating strong investor interest on the last day of the subscription period.

Anchor Investors and Allocation

Schloss Bangalore raised ₹1,574.99 Crores from Anchor Investors, who subscribed at the upper price band of ₹435 per share. A total of 2.62 Crore equity shares were allocated to anchor investors from the Qualified Institutional Buyers (QIB) portion, signaling confidence from large institutional players.

IPO Objectives

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

1. Repayment/prepayment/redemption of borrowings and accrued interest: ₹2,300 Crores, split between the parent company and its subsidiaries including Schloss Chanakya, Schloss Chennai, Schloss Udaipur, and TPRPL.

2. General corporate purposes, aimed at strengthening the company’s financial position and supporting future growth.

Financial Performance Overview

Schloss Bangalore’s financials show a strong recovery and growth trajectory after losses in earlier years:

• Revenue from operations: ₹4,159.49 Mn (FY22), ₹9,032.67 Mn (FY23), ₹12,265.00 Mn (FY24), and ₹14,065.56 Mn (FY25).

• EBITDA: ₹877.19 Mn (FY22), ₹4,236.29 Mn (FY23), ₹6,000.26 Mn (FY24), and ₹7,001.68 Mn (FY25).

• Profit After Tax (PAT): Deep losses of ₹-3,198.29 Mn (FY22), ₹-616.79 Mn (FY23), turning to ₹-21.27 Mn (FY24), and finally a profit of ₹476.58 Mn (FY25).

The company’s pre-issue EPS for FY24 stands at ₹1.97, while the post-issue EPS is ₹1.43. The pre-issue P/E ratio is 220.18x and post-issue P/E ratio is 304.82x, which is significantly higher than the industry P/E of 95x, indicating a premium valuation.

Investment Considerations

While Schloss Bangalore is a leading luxury hospitality brand with a strong legacy, the IPO valuation is on the higher side, reflected in its elevated P/E ratios and modest returns on equity (ROE 1.32%). The Grey Market Premium of zero and the lack of anticipated listing gains suggest cautious investor sentiment. Given these factors, many market experts recommend avoiding the IPO if investors seek listing gains.

How to Check IPO Allotment Status

Investors can check their allotment status on or after May 29, 2025, through the registrar’s website by entering their application number, PAN, or DP Client ID in the IPO allotment section.

Schloss Bangalore’s IPO offers an opportunity to invest in a globally recognized luxury hospitality brand with a proven track record and improving financial performance. However, investors should weigh the premium valuation and current market conditions carefully before subscribing. The company’s strategic use of proceeds to reduce debt and strengthen subsidiaries aims to solidify its financial health and long-term growth prospects

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