The Leela’s Mega $400-Million IPO Now Has a Date

The timing couldn't be better: The Leela-parent Schloss Bangalore is gearing up for a mega IPO to drive diversification and expansion just as the hotel industry in India is heating up.

Schloss Bangalore, the parent group of Indian luxury hospitality brand The Leela Palaces, is ready for its initial public offer (IPO). The INR 35 billion ($409 million) IPO is set to go live on May 26, as listed on the National Stock Exchange. The company had received approval for its IPO from regulator Securities and Exchange Board of India (SEBI) in December last year.

While the Draft Red Herring Prospectus (DRHP) of Schloss Bangalore filed last September sought approval for a massive INR 50 billion ($599 million) IPO, the finalized Red Herring Prospectus (RHP) filed on Tuesday revised this down to INR 35 billion. This includes a fresh issue of up to INR 25 billion ($292 million) and an offer for sale by promoter Project Ballet Bangalore Holdings of up to INR 10 billion ($117 million).

Plans for IPO Proceeds: As per its prospectus, the company aims to use the IPO proceeds to the tune of INR 23 billion ($269 million) for debt reduction.

Apart from this, Schloss also said it would be using the funds for strategic initiatives, funding organic and inorganic growth including through acquisitions, capital expenditure towards hotel assets, marketing and brand building, and working capital requirements.

It added that through 2028, the company plans to add seven new hotels to its portfolio, expanding its room inventory by 678 keys. “Our growth pipeline comprises modern palaces, hotels and resorts including expansion in new segments such as wildlife, spiritual and heritage tourism, diversifying our geographical footprint across additional cities and tourist destinations. This includes modern palace hotels in Agra and Srinagar, resorts in Ranthambore and Bandhavgarh and serviced apartments in M