Leela Hotels ₹3,500-crore IPO opens on May 26: Check price band, lot size & more ahead of launch

Leela Hotels, which operates luxury hotels and resorts, will launch its ₹3,500-crore initial public offering (IPO) on May 26. The IPO will remain open for subscription till May 28. The IPO is a combination of a fresh issue and offer-for-sale (OFS).

Established in 1986, Schloss Bangalore is the parent entity that owns and operates the luxury hotel chain "The Leela" in India. It is one of the largest luxury hospitality companies by number of keys in India.

The company has a portfolio of 3,553 keys across 13 operational hotels under The Leela Palaces, Hotels, and Resorts. Schloss Bangalore (Leela Hotels) has a strategic presence across 10 key business and leisure destinations in India, covering 80% of international and 59% of domestic air traffic in FY25.

Leela Hotels IPO details

Leela Hotels IPO aims to raise ₹3,500 crore through its public issue. The issue is 100% book-built and is a combination of a fresh issue worth ₹2,500 crore and an offer-for-sale (OFS) of ₹1,000 crore.

The company has fixed the price band of the issue at ₹413 to ₹435 per share. The lot size, or the minimum bid quantity to apply for the issue, is 34 shares. This equates to a minimum investment amount of ₹14,790 per lot at the upper end of the price band for retail investors.

Leela Hotels has appointed JM Financial, BOFA Securities India, Morgan Stanley India Company, J.P. Morgan India Private, Kotak Mahindra Capital Company, Axis Capital, Citigroup Global Markets India Private Limited and others as book-running lead managers of the IPO, while Kfin Technologies Limited is the registrar for the issue.

Leela Hotels IPO: Important dates

Leela Hotels' IPO will remain open for bidding from 26 to 28 May. After the bidding is closed, the allotment of shares is expected to be finalised on May 29.

Successful bidders can expect the shares to be credited to their demat accounts by May 30, with others receiving refunds on the same day. Leela Hotels shares are scheduled to list on the BSE and NSE on June 2.

Leela Hotels IPO objective

The company plans to raise ₹2,500 via a fresh issue. Net proceeds from the IPO will be used towards the following objectives:

• Repayment of outstanding borrowings: The company will use ₹2,300 crore for repayment/pre-payment of certain outstanding borrowings availed by the company and its subsidiaries
• General corporate purposes: Part of the IPO proceeds will be used for general corporate purposes not exceeding 25% of the gross proceeds.

About the company

Leela Hotels operates 13 hotels across the country. The portfolio comprises five owned hotels, seven managed under hotel management agreements, and one franchised hotel owned and operated by a third party.

In FY25, the company recorded an average room rate (ARR) of ₹16,409 and revenue per available room (RevPAR) of ₹10,696 across its operational properties, while the overall average occupancy rate of 65%.

The company’s managed portfolio comprises seven operational properties under hotel management agreements with third-party owners. The managed portfolio achieved an ARR and RevPAR that were 1.3 times and 1.2 times, respectively, compared to comparable hotels in their micro-markets.

Further, the company plans to expand its portfolio with seven new hotels, aggregating approximately 678 keys or 19.08% of existing keys through 2028 that will be either developed, owned or managed by the Leela Hotels.

India’s luxury hospitality sector is projected to grow strongly, with GDP expected to reach $ 5.1 trillion by 2027 and high-income households increasing from 24% in 2018 to 56% by 2030. Leela Hotels is well-positioned to capitalise on this growth with its premium portfolio across key destinations.

Financial snapshot

Strengths

• Leela Hotels is a globally acclaimed luxury hospitality brand with 250+ awards and consistently high guest satisfaction.

• The company’s owned portfolio of five iconic hotels (1,224 keys) in high-barrier markets like Delhi, Bengaluru, and Chennai offers premium locations, large average room sizes (~36% above industry average), and limited new supply, enabling strong pricing power.

• Strong asset management boosted RevPAR to 1.4x the industry average, with 65.36% of room revenue from direct sales.

• The company is led by a seasoned management team with over 20 years of hospitality experience, supported by a distinguished board, driving operational excellence and strategic growth through deep industry expertise.

Risks and threats

• The company derives a significant portion of its total income from its five owned hotels, 93.46% in FY25, 93.77% in FY24, and 91.13% in FY23, exposing it to risks from adverse events affecting these properties or their regions.
• The company has secured borrowings worth ₹3,908.7 crores as of FY25. Failure to meet obligations of loans could result in asset seizure or forced sale.
• The company and key subsidiaries have experienced negative net cash flows (₹100.23 crores in FY24 and ₹84.13 crores in FY23) and historically may continue to do so, potentially impacting operations and financial health.