Leela Hotels IPO: 10 Key Things to Know from Rhp

Shares of Schloss Bangalore Ltd, The company behind India’s renowned luxury hotel chain the leela, will only debut on the stock market, with its initial public offering (IPO) on Monday, May 26. The three-day offer will close on Wednsday, May 28, with a price band fixed at 413 to 435 per equity share.

The Public Issue will comprise a book-built offering of 3,500 Crore. This includes a fresh issue of approximately 5.75 Crore Equity Shares Amouning to 2,500 Crore, and an offer for Sale (ofs) of 2.3 Crore Shares Worth 1,000 Crore by existing shareholders. The minimum lot size for retail investors have been fixed at 34 shares, translating to a minimum investment of 14,042 at the upper end of the price band.

Notably, the company revised down the IPO size by Nearly 30 percent from the Previous proposed 5,000 Crore, Citing Strategic Considerations.

Of the total IPO, up to 75 percent is reserved for Qualified Institutional Buyers (QIBs), with anchor investors being allocated up to 60 percent of the QIB PORTION – Or Roughly 1,575 Crore. Non-Institutional Investors (NIIS) will get 15 percent of the issue, while 10 percent has been set aside for retail investors.

The Basis of allotment is expected to be finalized on Thursday, May 29. If everything proceeds as planned, Schloss Bangalore’s shares are likely to be listed on bse and nse on monday, R.

A Consortium of Top Financial Institutions have been appointed to manage the issue. These include jm financial, bofa securities India, Morgan Stanley India, JP Morgan India, Kotak Mahindra Capital, Axis Capital, Citigrup Global Markets India, IIFL SECURITIES, IIFL SECURITIAS Investment Advisors, and SBI Capital Markets. Kfin Technologies has been appointed as the registra to the offer.

10 Key Highlights from Schloss Bangalore’s rhp

1. Strong Economic Tailwinds for Hospitality Growth: India’s GDP is projectioned to double from usd 3.6 trillion in 2023 to usd 7.1 trillion by 2030, Creating Nearly 200 Million High and Upper-Middle Income Households. This economic boom is expected to significantly boost hospitality demand, Mirroring past trends in the US and Europe During Similar Economic Phasses.

2. Vast headroom for organized hospitality sector: India Remains Underpenetrated in the Hotel Industry. Of the Estimated 3.4 Million Hotel Keys, only 11 percent belong to the Organized Sector, with Luxury Keys Accounting for a Mere 17 Percent of Branded Hotels. Compared to Peers in Apac, India’s Per Capita Luxury Key Inventory is Significantly Lower.

3. Competitive positioning in luxury segment: Schloss Bangalore Operates under the Leela Brand, which stands out as India’s only institutionally owned and managed, Pure-Play Luxury Hotel Chain. As of May 31, 2024, IT Operates 12 Hotels with 3,382 Keys, and Recorded the Fastest Revenue Growth in the Luxury Segment Between Fy22 and FY24.

4. Domestic Travel Set to Surge: Domestic Tourist Visits are projected to Rise from 2.5 Billion in 2024 to 5.2 Billion by 2030. Improved Travel infrastructure, Rising Disposable Incomes, And Government Push For Tour Tourism ARESMAM ARESMEM Growth, Doubling Domestic Air Passenger Traffic to 693 Million in the same period.

5. Operational risks in focus: The rhp flags several risks for the leela, include brand dilution, regulatory uncertaintees, reliance on Economic Cycles, and Challenges in Workforce Management. Rising Costs, Dependence on Discretionary Spending, and Regulatory Compliance are Key Areas of Concern for Sustaining Long-Term Performance.

6. Brand Strength and Global Recognition: The Leela has been over 250 Awards Since 2021 and Ranks Consistently Among The World’s Best Hotel Brands by Travel + Leisure and Conde Nast Traveler. This Global Recognition Reinforces its position as a Leading Luxury Hospitality Player Rooted in Architectural Excellence and Guest-Tentric Experiences.

7. Backed by Global Giant Brookfield: Schloss Bangalore is promoted by funds managed or advised by Brookfield, which manages usd 925 billion in assets globally. Brookfield’s Expertise in Hospitality Spans Over 41,000 Keys Across 179 Properties Worldwide, Including Marquee Assets Like Pendry Manhattan West and Center parcs in the uk.

8. Focus on operational excellence: The Leela’s Operational Strategy Includes Aggressive Cost Optimization and Leadership Training Programs Such as LLDP and Lead. Between fy22 and fy24, it achieved a 63.2% flow-through from incremental reveneue to ebitda, underscoring strong cost management and production improments.

9. Strategic expansion plans: The company aims to grow through acquisitions and greenfield developments in both responses and urban locations. Notably, The Leela Palace Jaipur’s Arr and Revpar more than doubled Since FY20. Its Strategic Property Acquisitions Are Intended to Strengthen Brand Presence in High-Demand Markets.

10. Expanding portfolio footprint: As of May 31, 2024, The Portfolio Includes 3,382 Keys Across 12 Hotels in 10 Cities. The company plans to add eight more hotels with Around 833 Keys by 28, expanding itwork by over 24 percent and consolidating its presence in the luxury hosity space.

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